This is the third entry in a series of posts highlighting GCO’s new report – Increasing Access to Quality Healthcare for Low-Income Uninsured Georgians. The first entry provided an overview of the report and the second entry looked at Georgia’s healthcare safety net.
The lack of access to affordable care contributes to many individuals going without important services. Uninsured individuals in Georgia are nearly four times less likely than the insured to have had a routine check-up in the past two years[i] and are more likely to experience avoidable hospitalizations for conditions such as pneumonia, diabetes, and asthma.[ii] In 2011, 36 percent of low-income adults in Georgia reported that they went without care because of cost in the past year. Only two states had a higher percentage of individuals going without care.[iii]
Uninsured individuals are financially costly for taxpayers and the insured as well. In 2013, uninsured individuals across the country spent an estimated $25.8 billion out-of-pocket on medical care and received between $74.9 billion and $84.9 billion in uncompensated care. About 60 percent of the uncompensated care spending was provided by hospitals, 26.4 percent by publicly supported community providers, and 14 percent by office-based physicians who provided in-kind services or charity care.[iv]
Providers also attempt to recover their losses from providing uncompensated care to uninsured patients and those covered by government programs that pay below cost, such as Medicare and Medicaid, by increasing charges for those with private insurance. The higher prices charged to private insurance are passed on to families and business through higher premiums.
Estimates vary on how much cost shifting occurs. One study estimates that cost shifting through increased premiums and other similar strategies accounts for about 2.4 percent of private health insurance costs,[v] while another study estimates that uncompensated care cost shifting makes up 7.7 percent of private insurance costs.[vi] If the higher estimates are accurate, the uninsured population is costing the average Georgia individual $330 and the average family $900 per year in higher premiums.[vii]
[i] Patricia Ketsche et al., The Uninsured in Georgia, Georgia Health Policy Center, Issue Brief, November 2008, http://www.issuelab.org/resource/uninsured_in_georgia_2008.
[ii] John O’Looney, Louis Kudon, interand Glenn M. Landers, Avoidable Hospitalizations in Georgia: An Analysis of the Potential for Strategic Action, Georgia Health Policy Center, January 2005, http://ghpc.gsu.edu/sites/default/files/documents/ghpc/community_public_health/Avoidable_Hospitalizations_11-29-07_FINAL.pdf.
[iii] Health System Data Center, “Georgia: Low-Income Population Scorecard,” The Commonwealth Fund, accessed February 26, 2014, http://datacenter.commonwealthfund.org/scorecard/low-income/12/georgia/.
[iv] Teresa A. Coughlin et al., “An Estimated $84.9 Billion In Uncompensated Care Was Provided In 2013; ACA Payment Cuts Could Challenge Providers,” Health Affairs 33 (2014): 810, http://content.healthaffairs.org/content/33/5/807.abstract?=right.
[v] Coughlin et al., “An Estimated $84.9 Billion In Uncompensated Care,” 812.
[vi] Families USA, Hidden Health Tax: Americans Pay a Premium, May 2009, 26, http://familiesusa.org/sites/default/files/product_documents/hidden-health-tax.pdf.
[vii] Ben Furnas and Peter Harbage, The Cost Shift from the Uninsured, Center for American Progress Action Fund, March 24, 2009, 2, http://www.americanprogressaction.org/wp-content/uploads/issues/2009/03/pdf/cost_shift.pdf.