According to a study released today by the Department of Health and Human Services (HHS), on average, uninsured families are only able to pay in full for about 12% of the hospital bills they may incur. Even those uninsured families with incomes over 400% of the Federal Poverty Line (FPL) can only afford to pay 37% of their bills in full. These figures highlight the importance of health insurance for all families, which is mandated for those who can afford it and subsidized for those who can’t in 2014, by the Affordable Care Act.
Hospitals are required to provide emergency care to those in need, regardless of ability to pay. Every year, nearly 2 million uninsured Americans are hospitalized, resulting in high uncompensated care costs for hospitals — around $49 billion in 2008. Those costs are shifted to other payers, including government and private insurers, which raises premiums for those with health insurance.When people are uninsured, they often cannot afford to receive preventative care and are at risk of developing more serious health conditions, leading to costly emergency hospitalizations. Even people who are generally healthy often experience unexpected serious illness at some point in their lives. For this reason, most people obtain health insurance.
As noted in the HHS brief, lacking health insurance poses a greater risk of financial catastrophe than lacking car or homeowner’s insurance, and while the bill for a single hospitalization is about the same as the loss from a house fire, a person is ten times more likely to be hospitalized than experience a fire. When uninsured individuals experience these hospitalizations and bills for the care, they cannot pay.
The report goes on to note that most uninsured people have virtually no savings. Even those uninsured families with income above 400% FPL, about half have financial assets below $4,100. The figures are even more striking when compared to those with insurance. The median financial assets for the uninsured are $20, compared to a median of more than $14,450 for those under 65 with private insurance. It is no surprise that these families cannot afford health insurance, let alone the full cost of hospital bills. This is why subsidized and public coverage options are so important.
Providing affordable health insurance to all Americans not only benefits those currently unable to afford insurance, but those of us with insurance as well. Policy changes that reduce Medicaid spending by creating barriers for low-income families to enroll will result in less access to timely, preventative care and more cost shifting to other health care consumers.
Sara Eskrich