The Impact of Insuring the Uninsured

The democrats (and some Republicans) are insisting that every American MUST have health insurance, and that by providing health insurance to those who do not currently have it will save America billions of dollars a year.

This logic is based on the frustrating fact that many uninsured Americans who need health care, DO GET health care, but do not pay for it. Some of them show up and emergency rooms and skip out on the bill. Some go to private doctors and either arrange to get free care or promise to pay and then fail to fulfill that promise. Others go to free clinics or clinics operating to serve poor and uninsured people.

I'm going to go on record saying that insuring the uninsured will not save billions of dollars a year in health care costs, and it will not save millions of dollars a year in health care costs. In fact, it will likely cost us more than it will save us.

Let's suppose, for the sake of argument, that uninsured people (Americans and illegal aliens living here) run up 10 billion dollars a year in health care bills that they do not pay. I don't know if that number is even close, but for the sake of argument, let's just use that number.....

Now, someone has to make up for that 10 billion dollar loss. Who makes it up? Well, those of us who ARE insured do, basically. When someone runs up a bill and doesn't pay it, the cost of doing business for that provider has to be passed on, and it is (in essence) calculated into their cost of doing business. Their fees go up in order to cover those losses.

If we insure those people, the 10 billion dollar losses go away, and we don't have to make them up, right? Well .... not exactly. Instead of skipping out on 10 billion dollars in bills, that 10 billion dollars gets paid. And who pays it? The insurer. Whether it is a government-funded private program, an expansion of Medicaid or some other program, whoever is underwriting the insurance policy of those people will write checks for that 10 billion dollars. And where do they get the money? It has to come from somewhere, and it will come from the American Taxpayer. We who are paying the premiums for those previously-uninsured people will cover that cost by paying the premiums that are then used to pay those health care bills.

So, let me review and rephrase ..... The 10 billion dollars that was previously covered by insured Americans will be shifted and now be covered by taxpaying Americans. So YOU, if you're insured, will not pay for the costs of the uninsured. Instead, those costs will be covered by .... YOU, the taxpayer.

Now, doesn't that make you feel better.

Of course, those pushing for health care reform are going to argue that costs will decrease because the uninsured will no longer be going to expensive emergency rooms for treatment, but will instead seek treatment at "regular" doctor's offices.

Is that true, and does that really save money?

Well, yes and no.

It is likely/possible that those people who are now seeking care in emergency rooms will instead go to a "regular practice" to seek treatment. But let me ask: Does it REALLY cost that much less to treat a sore throat or a runny nose in a "regular" doctor's office than it does in an emergency room. Oh, I know the CHARGE is much less, but is the real COST that much different?

I would contend that the real cost for those people seeking treatment isn't going to be really different regardless of where they seek treatment. One of the big reasons the emergency rooms charge more for "basic" treatment is that they are covering the cost of the uninsured. (Yes, there are other reasons, too, including the fact that you are paying for a convenience). Once that increased cost factor goes away, the cost of operating an emergency room will go down. Furthermore, if a government-funded program starts flooding patients into private practices, and if reimbursements for these patients is less than for other types of insurance (like it is for Medicaid), the costs of "regular" private practices will go up faster than the revenues. Who will make up for these losses? The other patients. That would be you and me.

Those who support health care reform will also argue that health care costs will go down by insuring the uninsured because they will stay healthier and need less "serious" care because they will receive better preventive medicine.

I've already discussed how preventive medicine will cause costs to rise instead of decrease. But just to revisit that issue, in brief, visiting the doctor for hundreds of preventive care visits will increase health care costs overall, even if diseases and problems are diagnosed and treated earlier.

The bottom line is that anyone who tells you that they have a plan to save you money by creating a government bureaucracy and by cutting health care costs ... well, they are simply lying through their teeth.