This chapter has addressed the cost implications of expanding coverage to those without insurance. This is the correlate to the costs of uninsurance: What might it cost society to provide health insurance coverage to the roughly 41 million Americans who lack it? A precise answer to this question would require specifying many features of the proposed scheme for universal health coverage, including the administrative framework, the scope of benefits covered, the level of cost sharing, the level of provider payments for covered services, and the mechanism that would finance the insurance coverage (e.g., general revenues, payroll tax, employer mandate). Different choices in each of these areas could dramatically change the estimates of the costs of providing universal coverage. The Committee’s objective here is not, however, to provide a precise estimate of the net new costs of covering the uninsured population. Rather, it is to provide a range of the likely new real resource costs, based on the best evidence to date, of extending to the uninsured coverage similar to that of individuals who now have public or private health insurance.
These estimates should be treated as benchmarks. The Committee presents a range of estimates of the projected costs of covering those now uninsured that are plausible, generic, and illustrative. The incremental service costs are based on the costs of the coverage that accounts for the differences in morbidity and mortality between otherwise similar insured and uninsured Americans (IOM, 2002a,b).
If these benchmarks are appropriate, then the evidence suggests that the costs of the additional health care that would be provided to the uninsured once they become insured will be on the order of $34 to $69 billion a year, assuming no other major changes in scope of benefits, provider payment, or the structure of the health care financing and delivery systems. This amounts to a 2.8 to 5.6 percent increase in spending for personal health care services for 2001. It is equivalent to between one-third and two-thirds of the 8.7 percent growth in national expenditures for personal health care services between 2000 and 2001 (Levit et al., 2003).