Cost-shifting increases family spending by almost $1,800 annually

Most of the time, you hear about how hospitals are struggling lately, many of them because they are getting more uninsured patients, which doesn't help them close the gap on the Medicare and Medicaid patients' low reimbursements. Now, an AHIP study is looking at the problem from the other end: How much are the low reimbursements from Medicare and Medicaid costing insured patients?

After all, in order to cover the costs and keep hospitals in business, private insurers must pay more to make up for the Medicaid and Medicare reimbursements. The study from AHIP finds that the cost-shifting to cover this loss ends up increasing annual health care spending for a family of four by $1,788.

This amounts to approximately 15 percent of the average annual spending. In other words, commercial payers would be paying 15 percent less if Medicare and Medicaid were paying enough for hospitals to treat patients without a loss.

Essentially this amounts to a hidden tax on consumers and employers, in addition to the obvious tax money being spent on Medicare and Medicaid, the group contends.

To learn more about the study:
- read this AHIP press release