How High Is The Risk Of Catastrophic Health Expenditure For Uninsured People In The U.S.?

In the United States, uninsured people tend to rely on the emergency departments of hospitals for their health care needs, all thanks to the lack of access to lower-cost alternatives. Yet, uninsured people face high risks of being saddled down with astronomical medical bills for emergency care as compared to those with adequate health insurance. 

Even though hospitals often reduce medical bills for uninsured people, patients can face several hurdles while negotiating this reduction due to how convoluted and secretive this process is.  

As health care costs continue to skyrocket, ​​ 51% of uninsured adults reported in 2019 that they postponed care because of concerns around the unaffordability of medical costs. The World Health Organization coined the term catastrophic health expenditures to compare out-of-pocket health care expenses with income. It is defined as annual out-of-pocket medical expenses that exceed 40% of one’s income. 

Prior studies have revealed that the majority (70%-90%) of uninsured patients are at risk of catastrophic health expenditures after being hospitalized for emergency conditions such as traumatic injury, acute myocardial infarction, and stroke.

In a new study, Dr. Kirstin Scott from Harvard Medical School, and colleagues estimated the degree to which a single visit to the emergency department may contribute to financial hardship in catastrophic health expenditure terms for uninsured people. 

“Emergency department (ED) services are generally more expensive than other sites of care given the significant resources needed to staff and maintain an ED at all times,” the researchers wrote.

The team used data from 2006 to 2017 when there was 41.7 million nationwide emergency department (ED) encounters, according to the Agency for Healthcare Quality and Research Healthcare Cost and Utilization Project database. 

Around 51% of the people in this data sample were male and 49% were female. The majority were between the ages of 20 and 44 years. Among the uninsured who were treated and then discharged from emergency departments, the annual household income level was estimated at $65,435 in 2006 and decreased to $59,826 by 2017.

Dr. Scott and the team further analyzed that the median emergency department charge for a single treat-and-release encounter grew from $842 in 2006 to $2033 by 2017. Around 1 in 5 uninsured patients was at the risk of catastrophic health expenditures for a single treat-and-release ED visit. 

While in 2006, the estimated risk for high out-of-pocket medical expenses was 13.6% among the uninsured, it shot up to 22.6% in 2017. To make matters worse, those in the lowest income bracket faced a disproportionate share of this risk, with nearly 1 in 3 being forced to endure the burdens of catastrophic health expenditures.

The researchers estimated in 2017, 3.2 million patient encounters nationally were at risk of catastrophic health expenditures after a single treat-and-release ED visit. Because uninsured people lack an insurer to negotiate a lower rate, they are by default liable for up to 100% of the hospital’s assigned charges.

“This study showed that the catastrophic health expenditure (CHE) risk among the uninsured treat-and-release population was relatively higher among older age groups, lower-income groups, those living outside of urban areas, those provided care at metropolitan teaching hospitals, and those in the South,” the researchers observed.

Those in the lowest income group witnessed the greatest absolute increase in CHE risk over time — 18% in 2006 and 28.5% in 2017. Whereas those in the highest income bracket had a CHE risk of only 4.6% in 2006 that increased to 9% in 2017. 

“Given that the cost of hospitalization is nearly always greater than that of an outpatient ED visit, substituting a more intense but expedited work-up in the ED may ultimately be less financially burdensome for uninsured patients,” the researchers concluded. “Nonetheless, the present study findings show that uninsured people are commonly at risk of receiving a bill that can contribute to long-term economic hardship, even when a costly hospitalization is avoided.”