Expanding health coverage might not cost as much as policymakers assume.
New findings demonstrate that individuals who were continuously or intermittently uninsured between the ages of 51 and 64 cost Medicare more than those who had continuous coverage.
On average, the previously uninsured cost Medicare an additional $1,000 annually per person ($5,796 versus $4,773). These increased costs were due primarily to complications resulting from cardiovascular disease and diabetes and from apparently delayed surgeries for arthritis.
The study was published online Oct. 5 in Annals of Internal Medicine.
Michael McWilliams, HMS assistant professor of health care policy, and John Ayanian, HMS professor of health care policy and of medicine at Brigham and Women’s Hospital and HSPH professor of health policy and management, looked at two separate groups: one of 2,951 adults who had been continuously insured before becoming eligible for Medicare at age 65, and the other of 1,616 adults who lacked continuous insurance before age 65.
Not only did the previously uninsured cost the Medicare system substantially more, but nearly two thirds of this increase was due to potentially preventable hospitalizations and delayed procedures.
For example, after age 65, previously uninsured adults with cardiovascular disease or diabetes had a 48 percent higher risk of hospitalization for complications such as heart attacks, heart failure and strokes. Uninsured adults with arthritis were 86 percent more likely to be hospitalized for hip and knee replacements.
The researchers estimate that filling in the coverage gaps for these adults would cost $197 billion. However, this increase would potentially reduce Medicare spending by $98 billion, resulting in a net cost of $99 billion.
According to Ayanian, “This study suggests that not only are there substantial health benefits to expanding coverage but that the economic cost may not be as steep as previously thought.”
Students may contact Michael McWilliams at mcwilliams@hcp.med.harvard.edu or John Ayanian at ayanian@hcp.med.harvard.edu for more information.
Conflict Disclosure: The authors declare no conflict of interest.
Funding Source: The Commonwealth Fund; the authors are solely responsible for the content of this work.
