Harvard Study Suggests Assumed Cost for Universal Coverage is Misleading

As Congress continues to debate health care reform legislation, a new study by researchers at Harvard Medical School suggests that covering the uninsured population is less expensive than initial estimates if certain cost offsets are taken into consideration.

The study in the October 6 Annals of Internal Medicine found that people who were either continuously or intermittently uninsured between the ages of 51 and 64 cost the Medicare program an additional $1,000 annually per person on average compared to individuals who had had continuous insurance coverage before age 65. The increased costs primarily resulted from complications associated with cardiovascular disease and diabetes and from delayed surgeries for arthritis.

According to the study, although the cost of offering universal coverage for all adults older than age 50 until they become eligible for Medicare at age 65 has been pegged at $197 billion, extending coverage to adults from ages 51-64 would result in cost offsets of $98 billion because of decreased Medicare spending for these individuals when they reach age 65. The study found that the overall net cost increase for increasing coverage of adults ages 51-64 would be only $99 billion rather than $197 billion.

"As Congress debates health care reform, this study suggests that expanding coverage for older uninsured adults -- particularly those with treatable chronic conditions -- would produce not only substantial health benefits but also economic benefits, which should be considered when putting a price tag on those health care reform proposals," said J. Michael McWilliams, M.D., Ph.D., lead author of the study and an assistant professor of health policy and medicine at Harvard Medical School.

McWilliams said the cost estimates of proposed health care reform legislation currently do not include these cost offsets.

"Typically when the costs of covering the uninsured are calculated, the focus is entirely on the expected increase in health care use when uninsured people gain coverage," said McWilliams in an interview with AAFP News Now. "But the resulting health benefits of that care are often ignored, and those benefits may offset some of the upfront costs of expanding coverage if they lead to fewer complications of chronic disease."

Harvard Medical School researchers conducted the study to get a comprehensive picture of how heath insurance coverage and the lack of coverage affected Medicare spending after age 65. They analyzed information from the Health and Retirement Study, a nationally representative longitudinal study that has collected health insurance and other information from a large sample of adults since 1992.

Researchers collected information from the Health and Retirement Study every two years, tracking study participants' transition into Medicare. With this data, they were able to identify two distinct groups: a group of 2,951 adults who had been insured continuously before becoming eligible for Medicare at age 65 and a group of 1,616 adults who were either periodically or continuously uninsured before age 65.

Researchers then looked at Medicare claims data for these same individuals, tracking them from ages 65-74. They employed statistical methods to ensure that the two groups of adults were evenly balanced for all recorded demographic and health characteristics before age 65.

"We defined being continuously insured as those adults who reported insurance coverage at every survey before they turned 65," said McWilliams. "The intermediately or continuously uninsured were the ones who were uninsured at some point during that time, and on average, they were uninsured for about four years."

The most compelling feature of the study is that spending differences between the insured and uninsured were concentrated among the two-thirds of adults with cardiovascular disease or diabetes, said McWilliams. Previously uninsured adults with cardiovascular disease or diabetes were 48 percent more likely to be hospitalized for complications resulting from those conditions.

Yet, cardiovascular disease and diabetes are "very amenable to medical treatments," said McWilliams.

"Our findings suggest that uninsured adults before age 65 receive inadequate care for treatable chronic conditions, such as hypertension, diabetes and heart disease, which leads, in turn, to costly complications after 65, such as heart attacks, heart failure and strokes," said McWilliams.

The study underscores the importance of primary care in "preserving the health of aging adults and preventing costly complications," he said.