Finance and Credit Professional

While Texas remains the state with the highest percentage of uninsured residents in the nation, a key question is what is the impact of that, from a human and pure economic standpoint.

A December 2006 report by the Texas Health Institute, sponsored by Methodist Healthcare Ministries, indicated that the costs are substantial, both from a social and economic perspective.

A summary of the issue indicates that a higher than national average of people living in Texas, including those living in Houston, Dallas and Austin, remain without health insurance. Compared with the national average of 18% uninsured (in 2005), some 27% of Texas residents did not have health insurance, about 5.5 million people. Of that number, 20% of children 18 years of age or under were without health insurance and 31% of adults aged 19-65 were uninsured.

The definition of "access" to healthcare is having coverage available and affordable for each individual.

The Texas Health Institute report quotes the Kaiser Family Foundation in making the connection between health insurance and the relative health of an individual.

"Health insurance makes a difference in whether and when people get necessary medical care, where they get their care, and ultimately, how healthy people are. Uninsured adults are far more likely than the insured to postpone or forgo health care altogether and less likely to be able to afford prescription drugs or to follow through with recommended treatments. The consequences of reduced access to care can be severe, particularly when preventable conditions go undetected.

The Texas Health Institute report makes the point that having health insurance makes a difference in whether and when people get necessary medical care, where they get their care, and ultimately, in how healthy people are. "Uninsured adults are far more likely than the insured to postpone or forgo health care altogether and less likely to be able to afford prescription drugs or to follow through with recommended treatments," said the Report.

When it comes to the real cost of not having health insurance, reduced access to care can be severe, especially in cases where an otherwise preventable condition goes undetected. In the case of cancers, the report states that being uninsured is associated with fewer cancer screenings and an increase in premature deaths for cancer patients, as well as fewer services for trauma and heart attack patients and an increased risk of death when they are hospitalized.

While 53% of Texans participate in an employer-sponsored health insurance plan, the remainder of state residents have limited choices for coverage. Individual policies from an insurance company account for just 4% of residents and public programs such as Medicaid cover another 12%. The Texas State Children's Health Insurance Program has eligibility guidelines regarding income and other criteria.

The end result, says the Institute of Medicine, is that uninsured adults have a higher overall mortality risk of 25%. Extrapolated, there are more than 18,000 excess deaths annually among uninsured people ages 25-64.

Health insurance affects health status, and various studies show strong links between people with more education having better health, and people with less education and less literacy having poorer health. One national study estimated that $73 billion is spent annually in avoidable health care costs due to low literacy. Education affects job choices and future income, which, in turn, can affect health status.

For students who miss school or cannot concentrate due to temporary or chronic health conditions, the educational system is not as effective, which can lead to lower academic achievement. In addition, school absenteeism affects school district finances, as funding is at least partially based on attendance.

The high number of uninsured people has other consequences as well, including the issue of uncompensated care at hospitals. Those costs are typically passed to taxpayers in the form of higher property taxes for the hospital districts of the metropolitan areas of Texas, including Dallas, Houston and Austin.

In Texas, the cost of uncompensated care (bad debt plus charity care) for hospitals (which bear the brunt of uncompensated care costs) was estimated to be $7.7 billion in 2003. Even so, hospitals do not share equally in uncompensated care costs. Government and not-for-profit hospitals have the most. In a study examining 193 hospitals in Texas, the 53 that were categorized as safety-net hospitals accounted for 59% of the total uncompensated care in 2003.

While the nine Texas counties that lie on the border with Mexico have high uncompensated emergency care -- about $393 million in 2000 -- other areas of Texas also have high uncompensated care rates, especially Parkland Hospital in Dallas, one of the busiest hospitals in the U.S. In 2002, Parkland had $410 million in uncompensated care, of which about 20% was estimated to be due to emergency and non-emergency care for undocumented patients, those who are ineligible for most federal programs such as Medicaid, but must be treated if they come to hospital emergency rooms with an emergency medical condition.

The uninsured rate also affects Medicaid reimbursements due to the fact that the state loses the federal Medicaid matching funds for treating those patients.

What is clear is that not having health insurance is an issue that remains at the forefront of public concern in Texas, both from an economic and social perspective.

About The Author :

Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com

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