The High Cost of Being Uninsured

When people talk about the risks and costs of no healthcare insurance in the United States, they often talk about the risk of something catastrophic, such as a major illness or serious accident. Those risks are significant, of course, but I think there’s another major cost that isn’t being discussed nearly as much. If someone in the US doesn’t have insurance, they are effectively charged dramatically more for everything than someone with health insurance is charged. My wife has had a number of surgeries and procedures over the past few years, so I’ve been able to see that dynamic in action repeatedly, but it’s there with everything from ordinary doctor’s visit to prescription drug costs. If you look at statements, it’s usually called something like the “insurance adjustment” and it’s often massive. I’ve seen the adjustment equal nine-tenths or more of the billed amount.

Remember, this is the amount the charge is reduced before either the insurance company or the individual pays anything. And that single fact is massively important. Let’s say that an individual or family, even with the ACA subsidies, can only afford a bronze plan with a $5,000 or so deductible before it pays much. With subsidies, such plans tend to be pretty inexpensive and should be in the reach of most everyone. A lot of people look at that amount and think the plan doesn’t provide any benefits for them until they have more than $5,000 in health care expenditures.

Nothing could be farther from the truth.

Because of this hidden benefit of being insured, a single ER visit for a minor fracture with x-rays could end up costing hundreds, if not thousands of dollars more for the uninsured patient than for the insured patient even if the insurance company doesn’t actually pay a cent because the deductible has not been reached. Even the difference in the amount charged for a single, simple office visit will likely be more than a month’s subsidized premium for a bronze plan.

Now, if you think the above is a horribly broken system, then I agree with you. But that’s reality in the US today. And as long as that’s the case, the benefits of being insured in America don’t start when the insurance company begins paying. They begin immediately and you receive those benefits even if the insurance company never pays anything at all.

So if you still have no health insurance and either don’t think it’s worth it or don’t believe you can afford it, you need to reevaluate your decision. It’s invaluable and almost essential in the US as things work today and you really can’t afford not to have it.