Study: Insured pay 'hidden tax' for uninsured health care

ByABC News
May 27, 2009, 11:36 PM

WASHINGTON -- The average U.S. family and their employers paid an extra $1,017 in health care premiums last year to compensate for the uninsured, according to a study to be released Thursday by an advocacy group for health care consumers.

Families USA, which supports expanded health care coverage, found that about 37% of health care costs for people without insurance or a total of $42.7 billion went unpaid last year. That cost eventually was shifted to the insured through higher premiums, according to the group.

"I don't think anybody has any idea about how much they are paying because of the need to cover the health care costs of the uninsured," said Ron Pollack, the group's executive director. "This is a hidden tax on all insurance premiums, whether it is paid by business for their work or by families when they purchase their own coverage."

As President Obama and Congress take up health care legislation this year, the so-called hidden tax is increasingly becoming a talking point as proof that the U.S. health care system needs to be fixed:

Senate Finance Committee Chairman Max Baucus, D-Mont., in a May 11 statement announcing policy options for expanding health care coverage, said: "The cost of that care is paid by every American with insurance in the form of a hidden tax of more than $1,000 a year in increased premiums."

Health and Human Services Secretary Kathleen Sebelius, a Democrat, said at a House hearing earlier this month: "The large number of uninsured Americans impose a hidden tax on other citizens as premiums go up, and leaves too many Americans wondering where they will turn if they get sick."

California Gov. Arnold Schwarzenegger, a Republican, said in a health care speech earlier this month: "We've got to stop that hidden tax. Everyone must be insured."

How this hidden tax will be eliminated will be a point of contention as the debate over health care intensifies.

Baucus, in a statement to USA TODAY, said that ensuring all Americans access to health care is key to improving care while cutting costs. "Health care reform will lower premiums and out-of-pocket costs for American families, free up cash for American businesses and make them more competitive around the world, and cut the country's debt and help keep the Medicare program sustainable for the next generation," he said.