U.S. group says health premiums hit by uninsured

WASHINGTON Thu May 28, 2009 2:12pm EDT

WASHINGTON (Reuters) - U.S. families with health insurance are paying an estimated $1,017 more in annual premiums to pay for healthcare for the uninsured, according to a report released on Thursday.

The report by Families USA, an influential healthcare reform advocacy group, said doctors, hospitals and other health providers try to recover the cost of uncompensated care by increasing charges for those with private insurance. Insurers pass those costs to consumers in the form of higher premiums.

The report is likely to be used by lawmakers to help them make the case for an overhaul of the U.S. health system aimed at containing soaring costs and expanding medical coverage to the uninsured.

Ron Pollack, Families USA executive director, said the report shows that even those with employer-provided health insurance have a stake in expanding coverage to an estimated 46 million without insurance.

"That hidden health tax hits America's businesses and insured families hard in the pocketbook," Pollack said at a news conference. "They therefore have a clear financial stake in expanding coverage in health care reform this year."

That "hidden health tax" currently stands at $1,017 for a family policy and $368 for an individual, the report said. That compares with an extra $922 in family insurance premiums and $341 for an individual in 2005, when the group had a similar study conducted.

President Barack Obama has said he wants Congress to pass healthcare legislation by the end of the year.

EXPANSION OF MEDICAID?

Pollack said he expects the overhaul to make "significant progress toward covering everyone" and reducing the cost shift from the uninsured.

He said he expected to see an expansion of the Medicaid health program for the poor to help cover low-income households, and government subsidies to help more moderate-income families afford coverage.

Pollack also said he expects to see some sort of subsidies for people with insurance to ensure their out of pocket expenses for co-pays and coverage limits do not exceed a certain percentage of their incomes.

Pollack said the report's estimate on the cost shift does not reflect a recent jump in unemployment this year that has likely swelled the ranks of the uninsured. The cost shift number will likely move higher as a result, he said.

The study was conducted for the group by Milliman, Inc., an independent actuarial consulting firm, and was based on 2008 cost data.

The report said that many people without insurance put off health care and the study said at least 22,000 people between the ages of 25 and 64 died in 2006 due to the lack of health insurance.

The uninsured who sought treatment in 2008 received about $116 billion in care, the study said. Of that, they paid for about 37 percent of the costs and government programs and charities paid for another 26 percent, the study said.

The rest, about $42.7 billion, was uncompensated care that was passed on to the insured in the form of higher prices for their care, it said.