Physician Group’s Study Claims Cost to Society of Lack of Health Insurance in U.S. Tops $100 Billion

May 11, 2004

The cost to society of Americans living without health insurance could run into hundreds of billions of dollars, according to a new report released by the American College of Physicians (ACP).

ACP’s The Cost of Lack of Health Insurance is a comprehensive analysis of studies that have been done on the direct costs the health sector incurs due to the uninsured, as well as the costs associated with the adverse health implications of living without insurance. ACP released the report to coincide with Covering the Uninsured Week, a nonpartisan campaign to focus attention on the need to secure health coverage for all Americans through a series of events scheduled during the week of May 10-16. ACP is a national supporter of Covering the Uninsured Week.

In terms of direct costs to the health system (in 2001 dollars), the uninsured receive as much as $98 billion in medical care, $35 billion of which is considered uncompensated. Diverse sectors of the health care system bear the direct costs of this care.

— Total government spending on the uninsured is about $30 billion a year, representing the bulk of the cost.

— Hospitals provide about $24 billion worth of uncompensated care.

— Physicians spend about $5.1 billion a year caring for patients who cannot pay their bills.

— Employers and managed care companies spend between $1.5 and $3 billion through higher rates to cover part of the $24 billion hospitals spend caring for the uninsured.

These costs are compounded by the adverse health effects of lacking insurance. The resulting inadequate preventive care and delayed treatment the uninsured receive taxes society heavily. The effects include reduced life expectancy, lower workforce productivity, diminished educational attainment, imperiled public health, and the financial burden shouldered by uninsured individuals and communities, according to the report.

ACP’s report references an estimate that the aggregate, annualized cost of diminished health and shorter life span falls between $65-$130 billion for each year of health insurance forgone.

This figure does not include the increased financial risk and uncertainty borne by the uninsured and their families, which is estimated to cost between $1.6 billion and $3.2 billion.

The report found that the estimated value of health gained when an uninsured child or adult is given an additional year of coverage ($1,645 to $3,280) exceeds the estimated annual cost of the additional health care that the uninsured would use if insured ($1,004 to $1,866).

“Critics of universal coverage claim it would be too expensive due to the additional medical care sought by newly insured Americans,” said ACP President Charles Francis, MD, FACP. “The United States already spends hundred of billions of dollars on the uninsured, most of it in a scatter-shot, piecemeal fashion that in no way matches the health and financial benefits of universal coverage.”

The report disputes the high cost of medical services that newly insured Americans would use. It estimates that the uninsured would use about $34-$69 billion (in 2001 dollars) in additional medical care if they were fully insured. This would account for about 3-6 percent of total health care spending. Such an increase in medical spending would increase health care’s share of gross domestic product (GDP (news – web sites)) by less than one percentage point.

“The debate over how to extend coverage to the uninsured must consider both the short- and long-term benefits and weigh these benefits against the expected cost,” said Dr. Francis.

The American College of Physicians is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include more than 115,000 internal medicine physicians (internists), related subspecialists, and medical students. Internists specialize in the prevention, detection and treatment of illnesses in adults.

The full text of The Cost of Lack of Health Insurance may be obtained at

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