A recent report by Families USA, an advocacy group, said that the average family pays $1,000 a year more for health insurance premiums to subsidize the cost of health care for the uninsured. The average individual pays $370 more per year. This cost-shifting becomes necessary whenever someone who doesn't have medical insurance receives care at a hospital emergency room, clinic or physician's office and then doesn't pay for the care. Families USA calls the cost-shifting a "hidden tax," and a justification for the Obama administration's plan to extend insurance coverage to all of the 50 million Americans who are now uninsured.
Families USA used federal data compiled by actuarial consulting firm Milliman Inc. Ronald A. Williams, the chairman and chief executive of Aetna Inc., appeared at a news conference with Families USA officials to support the findings. When hospitals and other healthcare providers have unreimbursed expenses, they generally increase what they charge private insurance companies like Aetna in order to make up for it. The insurance companies then pass on these increased costs as higher premiums.
According to the report, in 2008 hospitals, doctors and other providers incurred $116 billion in costs for providing healthcare to the uninsured. Of that total cost, $73 billion was paid by the uninsured out of their own pockets or through government programs and charities. The remaining $43 billion, or a substantial part of it, was passed on by private insurance companies as premiums to their insureds.