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The effect of universal coverage on health expenditures for the uninsured
P F Short1, B A Hahn, K Beauregard
1Agency for Health Care Policy and Research, Washington, DC, USA.
Objectives:
Universal coverage will trigger an increase in health-care spending, because the uninsured will use more services after they are insured. The effect of insurance status on expenditures is estimated here from a multivariate statistical model.
Methods:
The model is estimated with data from the 1987 National Medical Expenditure Survey, aged to 1994 using population projections from the US Bureau of the Census and expenditure projections from the Health Care Financing Administration.
Results:
Expenditures for the full-year uninsured increase by approximately $700 per person in 1994 as a result of universal coverage. Nearly half of the increase is because of a substantial increase in the likelihood of hospitalization.
Conclusions:
If the uninsured are enrolled in plans similar to those offered by employers currently, personal health-care spending increases by approximately $20 billion in 1994. There are other costs associated with universal coverage that are not included in this figure.