How Much Extra Do Uninsured Americans Pay Because of the Insured?

In the past week there has been a lot of news coverage regarding the cost of the uninsured on the insured Americans. All of these articles (and the studies they site) base their information on a theoretical “invisible” tax that results from uninsured patients. These so called “invisible” taxes are increased premiums to cover what the uninsured do not pay. What this study has not taken into account is the cost of the insured on uninsured Americans.

For most Americans with insurance there is a deduction of premiums from each paycheck. Then, when making an office visit, they will pay a small copay per visit. The doctor's office then files the insurance and the rest is magically taken care of. You receive a statement showing what the office charged, what you paid, what the insurance company paid and what, if any, you owe. Examine the statements closely and you will find that the insurance company pays only 40-60% of what the physician charges, claiming the remaining amount was more than the usual and customer charge for the service. Chances are the statement will also say that you owe nothing. This means that the physician is taking a 40-60% loss on a visit by someone who is insured.

For those who are uninsured the visit must be paid at 100%. That means no drastic discount for the charges that insurance companies deem above the usual and customary charges. In addition, these charges are often required to be paid upfront.

The uninsured must also deal with the inability to get a straight answer on charges for a service. For example, about three years ago it took ten calls to find a facility that could quote charges for a standard visit and strep test. Nine facilities quoted only a flat rate to just come in and refused to quote the requested charges. These same facilities can, however, provide quotes to an insurance company if they are seeking approval on a procedure.

The answer to this issue is not in requiring all Americans to be insured but in providing a market where charges are available upfront and are the same for all customers. To force those with lower incomes to buy insurance is wrong. Many can afford an office vist. Many can afford the premiums. What they cannot afford are the premiums plus the copays and deductibles. Forcing insurance upon people benefits no one but the insurance companies.