NCPA - National Center for Policy Analysis


May 10, 2007

Uninsured patients on average are billed 2.5 times more than what the insured are billed through their health plans, and more than three times what is billed to patients through Medicare, according to the study appearing today in the journal Health Affairs.

In effect, the uninsured are billed at full price, while health plans and Medicare receive deep discounts:

  • Hospitals might charge $12,500 for an appendectomy, for example, but collect only $5,000 from a health insurance plan.
  • Members of the plan actually pay a lot less, through nominal co-pays or deductibles.
  • Health plans can negotiate such discounts because they can direct a large number of patients to certain hospitals by making them part of their provider network.

Hospital groups immediately criticized the study -- which was based on 2004 data, the most recent available -- as being outdated:

  • Most states do not mandate discounts, but the American Hospital Association, for example, suggests that hospitals voluntarily offer discounts to uninsured patients who earn between 100 percent and 200 percent of the federal poverty line.
  • In California, a law that went into effect this year requires hospitals to offer discounts to uninsured patients who earn as much as 350 percent of the federal poverty income level, about $70,000 for a family of four.

Nevertheless, that still leaves millions of uninsured patients facing full hospital prices, said Gerard F. Anderson, author of the study and a healthcare researcher at Johns Hopkins University:

According to the Kaiser Family Foundation, about 15 percent of the nation's 45 million uninsured earn above 350 percent of the federal poverty income level, meaning they make too much to qualify for hospital discounts in many cases. But they are also too poor to afford health insurance.

Source: Daniel Yi, "Hospital's billing of uninsured questioned," Los Angeles Times, May 9, 2007.


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