The center piece of the Obama administration’s case for an individual health insurance mandate is the argument that people with private insurance pay for care for the uninsured through “cost shifting”—higher prices charged by doctors and hospitals to recover losses from uncompensated care.
So how much cost shifting is there? John Cogan, Glenn Hubbard and Dan Kessler reviewed the evidence the other day in the Wall Street Journal.
There are, surprisingly, few peer-reviewed studies of the magnitude of alleged cost shifting at the national level. A study conducted by George Mason University Prof. Jack Hadley and John Holahan, Teresa Coughlin and Dawn Miller of the Urban Institute, and published in the journal Health Affairs in 2008, found that “Private insurance premiums are at most 1.7 percent higher because of the shifting of the costs of the uninsured to private insurance.” For the typical insurance plan, this amounts to approximately $80 per year.
[A]nother recent peer- reviewed study by Massachusetts Institute of Technology economists Jonathan Gruber and David Rodriguez and published in the Journal of Health Economics, found no evidence that doctors charged insured patients higher fees to cover the cost of caring for the uninsured.