BNA News | Poor Health, Shorter Lives of Uninsured Costlier Than Providing Coverage, Study Says

The economic costs caused by the uninsured are at least as great as the public cost of providing coverage, according to a report released March 26 by the New America Foundation.

The report, Cost of Failure: The Economic Losses of the Uninsured, found that the poor health and shorter life spans of the uninsured cost the United States between $102 billion and $204 billion in 2006.

"Some might argue that given the sudden economic downturn, we cannot afford health reform. To the contrary: these numbers only further emphasize that the cost of doing nothing is more than the cost of health reform," Len Nichols, director of the New America Foundation's health policy program, said in a statement.

The New America Foundation is a nonprofit, public policy institute headquartered in Washington, according to its Web site.

Sarah Axeen and Elizabeth Carpenter of the Health Policy Program authored the report, which is based on a study done in 2000 by the Institute of Medicine.

The IOM study estimated that the economic costs of those who lack insurance cost was between $65 billion and $130 billion for "each year of health insurance forgone." The estimate considered economic losses because of premature mortality and unnecessary prolonged illness, according to the report. . .

The New America Foundation said in a press release that the higher estimate is likely more accurate because "the uninsured die sooner and remain sicker longer than the insured."

They added that the cost estimates would have been higher had they included "spillover costs" such as increased provider rates and insurance premiums that may result when medical bills go unpaid.

"This vicious cycle of "cost shifting" inextricably links the uninsured to rising health care costs and premium rates for the uninsured," the report said.

The report is available at http://www.newamerica.net/publications/policy/cost_failure.