Expanding Medicaid/SCHIP Raises Private Premiums

Posted by Linda Gorman in Colorado, Health Care on Jan 29th, 2009 | no responses

Expanding Medicaid and SCHIP will likely produce higher private health insurance premiums according to a study for the State of Colorado by the Colorado Health Institute. The report compared Colorado health insurance premiums in Pueblo, Denver and Weld County. Weld County includes Greeley and other communities on the I-25 corridor north of Denver.

According to the report

“Where there are lower income households and more people over age 65, there will be a higher percentage of the population on Medicare, Medicaid and CHP+, resulting in providers needing to shift more costs to commercial payers. In 2005, Pueblo had 41.7% of its population enrolled in these programs, where only 23.7% of Weld’s population and 22.3% of Denver’s population were similarly enrolled. This may be increasing the costs of commercial health insurance plans in Pueblo.”

While it comes as no surprise that people spend more when they spend other people's money, other findings in the report contravene the claim that expanding government programs will reduce costs and improve health.

Instead, it looks like government programs help hospitals do more with more. Pueblo had less hospital competition, and more staffed beds per 10,000 population: 491 compared to Weld’s 322. Denver had 4,072 staffed beds, but it is a regional medical center. Its two privately owned hospitals received 37% of the disproportionate share payments shared among 22 of Colorado’s privately owned hospitals in 2006.

In keeping with other findings showing that Medicaid and Medicare clients have higher emergency room utilization rates than either the uninsured or the privately insured, Pueblo had higher emergency department costs and utilization in 2006 than either Denver or Weld: 100.6 visits per 1,000 lives versus 99.3 for Denver and 73.6 for Weld.

Pueblo also had many more physician office visits per 1,000 population. There were 3,188 physician office visits per 1,000 people in Pueblo, 2,714 in Weld and 2,783 in the Denver metropolitan statistical area. No statistically significant differences in health risk factors were found among the three populations.

This suggests that aside from gorging the coffers of those who want dysfunctional government health care programs expanded in order to crowd out all private medical arrangements, the massive SCHIP and Medicaid expansions in the pork-filled stimulus package will also raise costs for responsible people who pay for their own health care and health insurance.