Health Reform = More Cost Shifting

One of the biggest reasons health care costs are rising is because of the increasing shift of costs to private citizens because Medicare and Medicaid keep paying doctors and hospitals less and less. Reports last fall put the amount at almost $90 billion per year.

That dwarfs the extra we pay for "charity care," provided to uninsured patients. Unfortunately, this will likely get worse if more people are enrolled in Medicare and Medicaid in the future, which is what is being proposed on Capitol Hill.

Comments (3)

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  1. Bart Ingles says:

    The authors estimate that cost shift adds 10.7% to the cost of health care for a typical family. But how much does it reduce the cost to Medicare and Medicaid?

    If total government spending is about equal to private health care spending, would it be reasonable to estimate that total Medicare and Medicaid spending would have to be around 10% higher without cost shifting? In other words, the real cost for these programs is about 20% higher than the real cost for private health care?

  2. Stephen C. says:

    Bart: Excellent point.

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