As a nation, we do many things to reduce societal risk and promote health. We regulate the safety of cars, enforce standards to make our workplaces safer and set limits on exposure to toxic chemicals. Fewer fatal car crashes and healthier work and home environments allow people to live longer and healthier lives. We need to think about the benefits of universal health insurance in the same way.
As Congress creates a prescription drug benefit for the 40 million Americans who have coverage for hospital and physician services through Medicare, we should keep in mind the societal costs borne by all of us because more than 43 million Americans have no coverage for any health care. Significant costs, often hidden, and significant risks, such as worse health and earlier death, result from the lack of health insurance.
When our federal government considers new health and safety laws it often conducts economic analyses to determine whether the anticipated cost of the program or intervention is worth the reduction in health risks. We know, for example, that people with health insurance use medical services more often and, as a result, enjoy better health than those who lack coverage. It is therefore reasonable to assume that if everyone had health insurance, total health spending would be greater. It is also reasonable to assume that the uninsured would have better health. The key question, in both instances, is: “How much?”
Not every dollar spent on extending health insurance to all would be new spending. We already spend an average of about $100 billion annually on health care for people who are without health insurance for all or part of a year. About a third of this spending comes out of the pockets of people who lack, or recently lost, their health insurance. Another $5 billion is contributed by physicians through charity care.
Most of the money, however, comes from federal, state and local governments to support hospitals, community health centers and other health care providers who treat people who do not have health insurance. If everyone had health insurance coverage during 2001, the estimated additional cost of health care that year would have been between $34 billion and $69 billion. This would have added between 3% and 6% to the nation’s health care bill that year. By comparison, the actual increase in health care spending in the United States that took place between 2000 and 2001 was about $100 billion.
Would this increased spending be worth the cost?
Some of the benefits of universal coverage are hard to calculate precisely or cannot be expressed in monetary terms — but they are valuable nonetheless. Millions of families would gain peace of mind from knowing that a trip to the hospital will not bring huge bills. This would improve their ability to plan for the future, something middle-class Americans once took for granted, at least with respect to health care expenses.
Medicare and public disability programs would probably cost less if the entire American population had continuous coverage because people would be able to take better care of themselves and therefore prevent or forestall the development of major health problems in the later years of life. Our nation’s hospitals, trauma centers, emergency rooms and other health care institutions would be better able to meet the needs of communities because they would be relieved of the financial burden of caring for millions of uninsured Americans. The economic vitality of our country would be increased by a healthier, happier and more productive workforce.
Other benefits are easier to quantify. Advances in medical technology help those with access to good health care live healthier and longer lives. Overall, people without health insurance face a higher risk of poor health and premature death than similar people with coverage, in part because their access to care is compromised. On an annual basis, lack of health insurance contributes to an estimated 18,000 needless deaths.
The Institute of Medicine’s Committee on the Consequences of Uninsurance estimates that each year lived without health insurance produces a personal health loss, on average, of between $1,600 and $3,300 per person. When this total is multiplied by the millions of uninsured, it equates to an annual estimated cost to society of $65 to $130 billion — substantially more than the probable cost of covering the uninsured. Advocates of covering the uninsured have long argued that universal coverage is the right thing to do. This moral argument, however, has not compelled policy makers to move forward. After considering the magnitude of the human and economic costs of uninsurance, it should be abundantly clear that providing universal coverage is also the smart thing to do. Rather than arguing that we cannot afford to cover the uninsured, it might be reasonably asked whether our nation can continue to afford not to cover the uninsured.
Finding a politically feasible path to universal coverage will not be easy. The political process of identifying a package of benefits and how it would be administered will be difficult. Determining how best to spread these costs among businesses, health care providers, taxpayers and health care consumers will be tougher still. Nevertheless, it will be worth it.
We now know that the status quo imposes tremendous costs — not only for the tens of millions of Americans who lack health insurance and the millions of American families who have one or more member who is uninsured, but also for those of us who have health insurance. The financial strain of providing uncompensated care to the uninsured is weakening parts of our health care system that everyone uses, insured and uninsured alike. The economic costs of uninsurance are great, and they are not born evenly across society. The greatest burdens are born by those who are least able to pay.
Americans are not reaping the full benefits of modern health care because so many of our fellow citizens are denied full access to it. For the same reason that we invest in safer cars, healthier food and less hazardous workplaces, we should invest in everyone’s health by assuring universal access to health insurance.
Dr. Arthur Kellermann, co-chair of the Institute of Medicine’s Committee on the Consequences of Uninsurance, is director of the Center for Injury Control at Emory University School of Medicine. Wilhelmine Miller, project co-director of the Committee on the Consequences of Uninsurance, is a senior program officer for the Institute of Medicine.