NCPA - National Center for Policy Analysis


June 21, 2010

More people are likely to turn to the emergency room for their health care and they are likely to do so more frequently under the new health reform legislation.  This finding is surprising because an oft repeated argument for insuring the uninsured is that it will allow people to seek less costly and more accessible care elsewhere, says John C. Goodman, President, CEO and Kellye Wright Fellow with the National Center for Policy Analysis. 

Emergency room costs will increase for two reasons, says Goodman: 

  • About half the newly insured will enroll in Medicaid and Medicaid patients seek emergency room care more often than the uninsured.
  • While the newly insured will try to increase their consumption of care, the absence of any program to create more providers will force patients to turn to emergency rooms as the outlet for increased demand. 

According to the Congressional Budget Office: 

  • Recently enacted health reform will eventually cause 32 million uninsured people to obtain health insurance they otherwise would not have had; the Chief Actuary of Medicare puts the figure at 34 million.
  • Under both estimates, about half of the newly insured will enroll in Medicaid and the State Children's Health Insurance Program.
  • Roughly an equal number will obtain insurance in the to-be-created health insurance exchanges. 

Interestingly, health reform in Massachusetts cut the number of uninsured in half by enrolling people in Medicaid and private insurance plans offered in a health insurance exchange.  However, as in the case of the new federal law, no measures were taken to expand the supply of doctors.  That is one reason why the wait to see a new doctor in Boston is twice as long as in any other U.S. city.  Also, the use of emergency rooms for nonemergency care in Massachusetts today is as great as or greater than it was before the state health reform was adopted. 

We do not know yet what insurance in the exchanges created under the new federal law will look like.  However, in Massachusetts people who have acquired subsidized insurance through an exchange are in plans that pay doctors fees about equal to Medicaid rates plus 10 percent.  Were this to happen nationally, the predictions of this analysis would be much worse, says Goodman. 

Source: John C. Goodman, "Emergency Room Visits Likely to Increase Under ObamaCare," National Center for Policy Analysis, Brief Analysis No. 709, June 18, 2010. 

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