Who Pays When Someone Without Insurance Shows Up in the ER?

If an uninsured patient shows up in the emergency room, who pays? The hospital? Taxpayers? The patient? Other patients?

The question is important as Republicans debate health care legislation that could result in more than 20 million fewer Americans having health insurance in ten years. If that happens, some people will go without care. Others will show up at hospitals, but won’t be able to pay their bills.

The year the Affordable Care Act passed, hospitals provided about $40 billion in “uncompensated care” — that is, care they were not paid for. That was nearly 6% of their total 2010 expenses.

A 1985 federal law requires emergency departments to stabilize and treat anyone entering their doors, regardless of their ability to pay.

But that doesn’t mean the uninsured can get treated for any ailment.

“There’s lots of medical care we want to consume that’s not an emergency,” said health care economist Craig Garthwaite, an associate professor and director of the health care program at Northwestern University’s Kellogg School of Management.

It also doesn’t mean that hospitals won’t try to bill someone without insurance. And the bill they send will be higher than for an insured patient because there’s no carrier to negotiate lower prices.

As a result, the uninsured are more likely to be contacted by collection agencies, as they face problems paying both medical and non-medical bills. One study, published in 2016 by the National Bureau of Economic Research, found that someone who goes into the hospital without insurance doubles her chances of filing for bankruptcy over the next four years.

For the bills that go unpaid, hospitals can try to compensate by charging other patients more. But that doesn’t happen as much as many people – including policymakers — think.

The authors of the ACA believed that increasing insurance coverage through Medicaid and subsidies for private insurance would lessen the cost-shifting that leads to higher insurance premiums. Supreme Court Justice John Roberts also mentioned that benefit in the 2011 decision he authored upholding the law’s constitutionality. But researchers haven’t been able to document much of a cost shift.

Studying the effects of expanding Medicaid in Michigan – where more than 600,000 gained coverage – researchers at the University of Michigan have found no evidence that the expansion affected insurance premiums. They did, however, document that hospitals’ uncompensated care costs dropped dramatically – by nearly 50%.

Conversely, when Tennessee and Missouri had large-scale Medicaid cuts in 2005, the amount of care hospitals provided for free suddenly increased. In a 2015 study published by the National Bureau of Economic Research, Garthwaite and his co-authors estimated every uninsured person costs local hospitals $900 in uncompensated care costs each year…

Read full story at WLTX.com

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