Employers to Pay $922 More in 2005 to Cover Health Uninsureds

June 9, 2005 (PLANSPONSOR.com) - Employers will have to shell out an average $922 extra in 2005 for their workplace family health coverage to fund the unpaid health expenses of the uninsured, a Washington, DC health advocacy group has reported.

The Families USA report projects that the added costs for the uninsured will rise to $1,502 by 2010, according to the group’s Web statement. The added costs now account for one out of every $12 spent for employer-provided health insurance, according to the group. The group said its data helps quantify the amount of uninsured health costs shifted onto the policies of those with health coverage.

According to the report, family coverage health insurance premiums in six states will be at least $1,500 higher in 2005 due to the unpaid cost of health care for the uninsured. These states are:

  • New Mexico ($1,875)
  • West Virginia ($1,796)
  • Oklahoma ($1,781)
  • Montana ($1,578)
  • Texas ($1,551)
  • Arkansas ($1,514).

By 2010, there will be 11 states in which employer-provided family health coverage will cost more than $2,000 extra to pay for health services to the uninsured. These states are New Mexico ($3,169); West Virginia ($2,940); Oklahoma ($2,911); Texas ($2,786); Arkansas ($2,748); Florida ($2,248); Alaska ($2,248); Montana ($2,190); Idaho ($2,152); Washington ($2,144); and Arizona ($2,028), the group said.

High Stakes

“The large and increasing number of uninsured Americans is no longer simply an altruistic concern on behalf of those without health coverage but a matter of self-interest for everyone,” Ron Pollack, Families USA Executive Director, said in the Web statement. “The stakes are high both for businesses and for workers who do have health insurance because they bear the brunt of costs for the uninsured.”

The report found that approximately one-third (35%) of the health care costs incurred by uninsured people are paid by the uninsured. It is the remaining costs that are generally considered uncompensated care. Of those uncompensated care costs, a portion is picked up by federal, state, and local government agencies and the rest is shifted onto to premiums for those with health coverage.

The cost of health care provided to people without insurance that is not paid by the uninsured will exceed $43 billion nationally in 2005. In 11 states this uncompensated care will top $1 billion in 2005. These states are:

  • California ($5.8 billion)
  • Texas ($4.6 billion)
  • Florida ($2.9 billion)
  • New York ($2.7 billion)
  • Illinois ($1.8 billion)
  • Ohio ($1.4 billion)
  • Pennsylvania ($1.4 billion)
  • North Carolina ($1.3 billion)
  • Georgia ($1.3 billion)
  • New Jersey ($1.2 billion)
  • Michigan ($1.1 billion).

The report is here .