Medicare Compliance & Reimbursement

Many Americans fail to reach their developmental potential, and public programs like Medicare, the employment disability system, and the justice system incur substantial costs, as a result of high levels of uninsurance.

So says the Institute of Medicine's Committee on the Consequences of Uninsurance in the fifth in its series of six reports, which estimates what's lost to the nation as some 40 million Americans go without insurance on any given day. Among the burdens created for society by high levels of unin-surance, says the panel: large numbers of children who don't reach their developmental potential and additional monetary costs picked up by various public systems, including Medicare, the employment disability system, and the justice system.

Based on the standard value of $160,000 that economists have imputed to a year of life in perfect health, for an individual uninsured person each year without health insurance costs him or her between $1,645 and $3,280 in longevity and quality of life. That adds up to an "aggregate, annualized cost of the diminished health and shorter life spans" of uninsured Americans of "between $65 and $130 billion for each year of health insurance forgone."

Lack of coverage increases financial risks. For noncovered individuals and their families,the value of forgone "financial protection provided by health insurance" is equivalent to a loss of between $1.6 billion and $3.2 billion each year,says the panel.

Meanwhile, a variety of public programs "almost certainly have higher budgetary costs  than they would if the U.S.population in its entiretyhad health insurance up to age 65."The panel doesn't cite a specific dollar estimate of those costs.

However, the report notes numerous examples. For instance, working-age uninsured people whose hypertension or diabetes is uncontrolled "enter the Medicare program with more comorbidities and worse health status," which raise Medicare payments.Twenty percent of the nation's 3 million adults with schizophrenia and bipolardisorder are uninsured,according to the report. Lack of regular treatment for these severe mental illnesses throws an undetermined but likely large proportion of these people into the justice system, driving up costs for that public sector.