sated care onto the bills of insured patients, and the Committee also considers the evidence for such cost shifting.

The chapter is organized as follows. The first section briefly compares the average overall health expenditures for uninsured and privately insured populations. The following section examines the out-of-pocket spending by the uninsured and the distribution of their out-of-pocket expenses by service. The third section presents estimates developed by Jack Hadley and John Holahan of the Urban Institute of the amount of uncompensated health care services used by people uninsured for part or all of a year. The fourth and last section examines the incidence of the burden of uncompensated care costs across public and private payers, and more specifically how it is shared among the federal, state, and local governments.


Finding: Uninsured children and adults are less likely to incur any health care expenses in a year than their counterparts who have coverage. On average, those without any form of coverage over the course of a year incur health care costs less than half of per capita health care spending for those under age 65 who have coverage.2

Uninsured people are both less likely than those with coverage to use any health services in a given year and have lower expenditures for services on average (Taylor et al., 2001). As earlier Committee reports demonstrated, this lower level of utilization is the source of one hidden cost of uninsurance—higher morbidity and mortality as a result of using fewer and less appropriate health care services. The Committee does not mean to imply by this comparison, however, that all of the additional use of services by those with coverage is effective and appropriate, but simply that the greater amounts of services used by insured populations are associated with and contribute to their better health outcomes, relative to those of uninsured populations.

Table 3.1 presents data from the 1996 Medical Expenditure Panel Survey (MEPS), comparing the experience of full-year uninsured and full-year privately insured individuals under age 65 who used any health services of a particular kind in that year.3 Sixty-two percent of full-year uninsured persons incurred any health care expenses, compared with 89 percent of those with private insurance for the


This reflects the statistics reported in Table 3.2 that are not adjusted for differences in the age and sex composition of insured and uninsured populations. It is also consistent with analyses that are adjusted for demographic differences, as illustrated by the statistics in Table 5.3 in Chapter 5.


The 1996 MEPS is a two-year panel of about 22,000 respondents that is nationally representative of the U.S. noninstitutionalized population.

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