Uncompensated Care

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Lately, data are indicating that the seemingly inexorable rise in our health care costs may be attenuating. Is this real? Or, just an artifact? Given that there are large variations in health costs across the US, what does this trend mean for our local, state, and federal taxes.  And, given that these difference in regional costs will become exacerbated as more (Republican) states refuse to run their own health care exchanges, some of us are in for  additional costs.

“What?”, you say. How can I assert that fact? Unfortunately, it’s easy. Many of the states are assuring (conspiring?) that the lower income (the “working poor”) folks won’t be able to get affordable healthcare coverage. (These people are often referred to as “freeloaders” during the considerations of these legislatures.)  Which means that the costs for uncompensated care (the bills for health provisions, where the patient has no insurance AND does not have the ability to pay the bills) in those states will stay the same or rise.

How much money is involved in uncompensated care? Not much- only about $ 62 billion a year. Prior to “Obamacare” (PPACA), there were some 50 million uninsured persons in the US. Had all the states joined PPACA, as it was intended (i.e., written), the number of uninsured would have dropped to at best 20 million by 2018. (The various studies present a spread from 18 to 23 million.) That means that uncompensated care costs would have dropped to less than $ 36 billion. And, those numbers were developed assuming health care would keep rising at the rates that obtained until 2010; given the much lower increases in health care costs, the uncompensated costs would more likely have been $ 30 billion.

Uncompensated Care Provisions

While 75% of the costs are picked up by government, it does mean that doctors would be on the hook for about $ 5 billion of the bill (physicians generally “eat” 13% of uncompensated care costs) and state/local governments ante up about $ 7 billion (18%). Just so you know what that means- it means your state and local taxes have to cover those costs.  And, your doctor will eventually find a way to raise your costs, to cover his unpaid bills.

By the way, these numbers don’t take into account the number of uninsured that would have resulted without PPACA. Estimates for that situation arrived at a 20% increase in the number of uninsured (not a drop)- of which 20% would not be among the elderly (covered by Medicare). (You do recall, for example, that children can now be covered on their parents’ policies until age 26…)

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6 thoughts on “Uncompensated Care”

  1. Sadly, I don’t trust any numbers that are generated by our government. They work with a special math that only they know. They twist them to look good if it helps them and twist them to look bad if they are against a project.
    Chef William recently posted..Refried Beans

  2. I am not very informed on this matter, Roy, but in a simplistic view, it seems to me that this healthcare system is developing negative feedback symptoms. Doctors raise their costs and more people can’t afford private practice, healthcare’s cost increases, doctors are billed higher, doctors raise their cost and everything keeps raising.

    1. OK. Let’s consider how things really work in the US, Gustavo.
      Doctors are “free” to set their own prices. However, in reality, only those patients who are out-of-network (unaffiliated with any of the health care insurers with which the doctor is affiliated) or uninsured actually pay those rates. The physician- for those who are insured through his preferred provider(s)- is only paid what the insurance company has told him they will pay for that diagnostic code. Not one penny more. And, raising rates is a negotiated practice.
      So, when someone doesn’t pay and isn’t insured, the doctor requests those funds from the state, from localities, from other providers…. or eats the loss.

      1. Now I get it. It makes a lot more sense now those movies where doctors act just as good as their patient’s insurance.

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