Healthcare Business News

Reform Update: Effects of being uninsured linger even after entering Medicare, analysis shows

By Melanie Evans
Posted: January 22, 2014 - 4:00 pm ET

The immediate costs of going without health insurance are unfilled prescriptions, untreated conditions, debt from unpaid medical bills and the anxiety that comes with all of the above. A new analysis of Medicare spending suggests that the consequences of being without coverage linger after the uninsured get coverage.

Older adults who entered Medicare after being uninsured for years were more expensive (by an average of $2,300 the first year) and reported poorer health than previously insured seniors who entered the program, the Government Accountability Office concluded based on a review of the last decade's Medicare spending.

The results underscore previous research that highlights the disparities between the insured and uninsured. Those with insurance live longer, report better health and are less likely to avoid the doctor because of cost.

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The GAO's findings also suggest that more widespread access to health insurance could save Medicare the expense of stabilizing the health of the previously uninsured. The results are notable as the nation embarks on a rocky and patchwork expansion of health insurance, subsidized by federal financing and enforced by a mandate that nearly all Americans carry insurance. Nearly one in five older adults ages 55 to 64 lacked health insurance in 2012, the GAO said.

The push to reduce the number of uninsured under the Patient Protection and Affordable Care Act won't reach everyone. The law excluded illegal immigrants. And not all uninsured adults will have the same access to subsidized health insurance. States may choose whether or not to expand Medicaid. Two dozen states did not and left some low-income citizens without a subsidized option for coverage.

Nonetheless, that uneven expansion may benefit Medicare in coming years by improving the health and medical care of future enrollees, said Deborah Chollet, a senior fellow with Mathematica, a research and data collection firm. No one strategy or policy will slow U.S. health spending, “but certainly health status is an important dimension of the solution,” said Chollet.

Savings, however, may take years to materialize, Chollet cautioned. Many of those who gain insurance this year under the Affordable Care Act will have experienced years unmet medical needs. “That's a long time of deteriorating health.”

The uninsured who gained coverage with Medicare from 2001-2010 were about 23% more costly in the first year of coverage than those that transferred to Medicare from another health plan, suggesting possible pent-up demand for care, the GAO said. Medicare also spent more on outpatient care for the previously uninsured in the first two years after enrollment.

The previously uninsured were also less likely to report good health, the GAO found—79% compared with 84% of those who had been insured—and the gap widened somewhat through the first six years of enrollment.

“We know that people who lack health insurance, even for a period of time, have reduced access to care,” said Dr. John Ayanian, director of the Institute for Healthcare Policy and Innovation at the University of Michigan. That can be particularly problematic for adults with common chronic disease such as diabetes and heart disease, which can leave individuals acutely ill if not properly managed, he said.

Ayanian's recent research found that patients' reported health and use of primary care improved more significantly in Massachusetts than five nearby states—Connecticut, Maine, New Hampshire, Rhode Island and Vermont—in the years after Massachusetts required its residents to be insured.

New York's Medicaid reform

New York Gov. Andrew Cuomo called on the CMS to award the state $10 billion under a pending Medicaid waiver that would help the state “respond to future expectations under the Affordable Care Act.” More immediately, the state is seeking the $10 billion to help bolster failing hospitals in Brooklyn, which the governor singled out in a letter last May urging CMS approval. Cuomo included the $10 billion in state's budget plan, which he released Tuesday. The plan calls for $1.2 billion for hospital, nursing home and other healthcare capital projects, including efforts to merge and consolidate providers and restructure hospital capacity in the state.

Follow Melanie Evans on Twitter: @MHmevans

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