View Research by Author - Jack Hadley

Citation URL: http://www.urban.org/JackHadley

People uninsured for any part of 2008 spend about $30 billion out of pocket and receive approximately $56 billion in uncompensated care while uninsured. Government programs finance about 75 percent of uncompensated care. If all uninsured people were fully covered, their medical spending would increase by $122.6 billion. The increase represents 5 percent of current national health spending and 0.8 percent of gross domestic product. However, it is neither the cost of a specific plan nor necessarily the same as the government's costs, which could be higher, depending on plans' financing structures and the extent of crowd-out.

Recently, Massachusetts passed landmark legislation designed to expand health insurance coverage. This legislation includes a requirement that all adults enroll in a health insurance plan. This mandate takes effect only if an "affordable" plan is available. The definition of affordability for individuals and families of different incomes or circumstances is a critical decision in implementation and is relevant to any state or federal reform requiring individual premium or cost-sharing contributions, or both. This analysis was done to assist the policy design process in Massachusetts and delineates an empirically based approach to setting affordability standards.

Stephen Zuckerman and Jack Hadley (George Mason University) analyze the composition and medical costs of the uninsured in Louisiana after Hurricane Katrina. The estimates in the brief are the first available that are based on a detailed analysis of who the uninsured are in Louisiana, their current medical spending, and what their spending might be under Medicaid. The findings show that expanding Medicaid coverage to Louisiana's 716,000 uninsured would cost an estimated $2.3 billion in 2006 dollars. It also suggests that many of those who left Louisiana after Hurricane Katrina had coverage, so the number of uninsured in the state remained about the same, but their share of the total population increased.

Having health insurance is important for several reasons. Uninsured people receive less medical care and less timely care, they have worse health outcomes, and lack of insurance is a fiscal burden for them and their families. Moreover, the benefits of expanding coverage outweigh the costs for added services. Safety-net care from hospitals and clinics improves access to care but does not fully substitute for health insurance. These findings are supported by much research, although some cautions are appropriate in using these results.

This study, funded by the Maine Health Access Foundation, presented alternative estimates of the costs of health care that uninsured Maine residents receive and determined how much public revenue was available to offset those costs. Using data from health care providers, the study estimated that the costs of caring for the uninsured in Maine were $138 million in 2005, with hospitals and Veterans' Affairs facilities identified as the largest providers. Estimates based on household survey data from the Medical Expenditure Panel Survey showed that uncompensated care costs for the uninsured were only $81 million in 2005. The report discusses possible reasons for the large discrepancy between these two sources. Our review of federal and state funding sources in 2005 suggests there were roughly $110 million available to offset these costs of caring for the uninsured.

This study uses 2000 to 2004 Current Population Survey data to examine the effects of public premiums on the insurance coverage of children whose family incomes are between 100% and 300% of the federal poverty level. The analysis employs multinomial logistic models that control for factors other than premium costs. While the magnitude of the estimated effects varies across models, the results consistently indicate that raising public premiums reduces enrollment in public programs, with some children who forgo public coverage having private coverage instead and others being uninsured. The results indicate that public premiums have larger effects when applied to lower-income families.
Inquiry, Volume 43, Number 4 (Winter 2006/2007): 345-361.

A study by Jack Hadley documents that people who are uninsured receive less care and have worse outcomes following an accident or the onset of a new chronic condition than those with insurance. The study—based on analysis of eight years of data and over 30,000 observations—finds that following an accidental injury, the uninsured were less likely than the insured to receive any medical care (78.8% vs. 88.7%). Similarly, the uninsured with a new chronic condition were also less likely to receive care (81.7% vs. 91.5%). In addition, the uninsured with an injury were also twice as likely as those with insurance to have received none of the recommended follow-up care (19.3% vs 9.2%), and a similar pattern held for those with a new chronic condition (9.4% vs 4.4%). Ultimately, the study indicates that the uninsured were more likely to report not fully recovering and no longer being treated following an accident and roughly 7 months after the initial health shock, the uninsured with new chronic conditions reported worse health status than the insured with similar conditions.
Journal of the American Medical Association, vol. 297, no. 10: 1073-1084 (2007)

About 2.5 million New Yorkers were uninsured in 2005, and medical providers that serve them incurred some $2.8 billion in uncompensated care. Two separate analyses in this report agreed on this estimate, one using provider cost reports and the other household survey data. Budgetary and other sources showed that state, local, and federal governments supplied about $3.5 billion in revenues that offset these costs, through a complex mix of programs. If these uninsured people had all had insurance for the full year, their projected medical spending would have been higher by about $4.1 billion. Any insurance expansion program would incur these and additional costs as well.

Jack Hadley uses data from 1997, 1999 and 2002 National Surveys of America's Families to estimate a statistical model of the relationships between employment loss, insurance costs, and insurance coverage of non-elderly adults. Using a 2000 to 2003 study period, simulations based on the model suggest that the large increase in private insurance premiums (about 33 percent in constant dollars) was responsible for 3.1 of the 3.4 percentage point drop in private insurance coverage. Employment loss has a substantial impact on the coverage of affected individuals, but its impact on aggregate coverage is relatively small. Expanded public coverage absorbed only about one-quarter of the loss of private coverage. Hadley maintains that controlling insurance (and medical) cost inflation is critical to expanding insurance coverage, even after the employment rate recovers. (Medical Care Research and Review 63(4): 447-476, 2006)

Jack Hadley and James Reschovsky used physician survey data linked to Medicare claims data to analyze how fee levels, market factors, and financial incentives affect physicians' fee-for-service Medicare service volume. They found that Medicare fees are positively related to both the number of beneficiaries treated and the intensity of services provided. The results also suggest that physicians may manipulate the mix of services to increase the effective Medicare fee. Several market factors also influence the quantity of Medicare services physicians render. Results highlight limitations of the present system for compensating physicians in Medicare's fee-for-service program. (International Journal of Health Care Finance and Economics 6, pp 131-150, June 2006.)

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