Government Spending on Uncompensated Care is Less Than One Half of One Percent of Government Health Spending
One of the reasons given for universal health insurance coverage is that uninsured people receive medical care but do not pay their bills. It’s true: A new analysis published by the Kaiser Family Foundation estimates that providers delivered $84.9 billion worth of medical care to uninsured people, for which they were not directly paid. However, federal, state, and local governments compensated providers $35.9 billion, leaving $49.0 billion truly uncompensated.
Is that a lot? Well, all levels of government spent $1.3 trillion on health care that year. So, government funding of uncompensated care is 0.4 percent of all government health care spending. If government stepped up and compensated the remaining $49.0 billion, the total payout would amount to about one percent of all government health spending.
Is this really something we should be turning ourselves inside out over? Especially given the evidence that Medicaid does not give timely access to care, and the emerging signals that ObamaCare reduces timely access to care, it is far from clear that adding ObamaCare’s insurance bureaucracy on top of this situation is going to be worth the trouble, even for the beneficiaries.
Also interesting is how governments divide the pie: 62 percent ($32.8 billion) of the $35.9 billion is federal funds, versus 37 percent ($19.8 billion) state and local funds. (There is a small share of charitable contributions, as well.) What if those proportions were flipped around? If state and local governments carried most of the cost, and the federal government served only as a backstop? I’d bet the effectiveness, efficiency, and governance of compensating care for uninsured patients would improve dramatically.