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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Uninsured drive health costs up

Carla K. Johnson Staff writer

People who can’t pay their medical bills cost Washington state $318 million annually in care provided free by hospitals and doctors, according to a report released Thursday.

The costs are passed on to everyone in the form of higher prices for health care and insurance, the report said. In 2002, there were an estimated 549,535 Washington residents without health insurance, 9.4 percent of the population.

Washington Insurance Commissioner Mike Kreidler’s office issued the report, which also analyzed three proposals that Kreidler said could reduce the number of uninsured by 40 percent and stabilize the health insurance market.

The report gave a county-by-county breakdown of people without health insurance and the cost to local health-care systems.

“Nobody has put out these kinds of numbers before,” Kreidler said. “It forces policy-makers to take a hard look at the current system and its lack of sustainability.”

In Spokane County, more than 37,000 people have no health insurance, including almost 4,500 children and teenagers. Of people ages 19 to 64 years old in Spokane County, 12.6 percent have no health insurance.

Spokane County hospitals and clinics provide an estimated $19.6 million in care annually to people without insurance and others who don’t pay their bills.

Spokane hospitals are laying off workers and trying other budget-cutting measures, in part because of the growing problem of unpaid medical bills. Earlier this week, Empire Health Services announced plans to lay off 150 full-time equivalent employees. Providence Health Care is expected to make public its own plan for layoffs in mid-August.

“There’s a limit to how much cost-shifting hospitals can do,” Kreidler said. “You’re seeing the fallout there (in Spokane).”

Not all charity care and bad medical debt is caused by people without health insurance. Some people with health insurance still can’t afford to pay their deductibles and co-pays, Kreidler acknowledged.

More people are in health plans with higher deductibles and co-pays as employers shift more insurance costs to workers.

The state’s average insurance premium rose almost 20 percent in 2003, following several years of double-digit percentage increases.

The report detailed how three legislative proposals would affect the problem:

Pooling Risk: The plan would restructure the private insurance market so that the state would cover 75 percent of health-care costs over $25,000 for all insured state residents. Fans of the plan say a larger risk pool would reduce the price of premiums, making insurance more affordable.

Kreidler floated this plan to the Legislature earlier this year. At that time, the insurance industry questioned whether adding another layer to the insurance system would really save money. Kreidler’s report said the risk-pooling plan would increase the number of people insured by 6.6 percent.

Washington Fair Share: The plan would require more companies to provide health insurance benefits. Companies with more than 50 employees who work more than 86 hours a month would be required to provide health insurance or pay a fee. The plan would increase the number of insured people by 21 percent, the report said.

Care for Kids: The plan would provide health insurance for children, from birth to age 18, whose families can’t afford the coverage. It would increase the number of insured by 12 percent.

Kreidler’s estimate of the cost of the uninsured includes lost hospital profit. When hospitals report their charity care costs, they include not only actual costs, but what’s theoretically lost in profit.

In other words, hospitals’ charity care numbers equal what patients would have paid if they were charged in full for their hospital stays.

That full charge is an amount that most people with insurance don’t pay, however, because of contracted discounts with private insurance companies. People covered by Medicare and Medicaid also don’t pay the full charge because the government sets rates that don’t cover full charges.

The full charge for Providence and Empire hospital systems is roughly 50 percent more than the actual cost of a hospital stay.