September 9, 2009
CNN Truth Squad: Do the insured pay a $1,000 'hidden tax' to pay for uninsured?
Posted: September 9th, 2009 10:27 PM ET
The Statement:
President Barack Obama said in his September 9 address to a joint session of Congress that "those of us with health insurance are also paying a hidden and growing tax for those without it — about $1,000 per year that pays for somebody else's emergency room and charitable care."
The Facts:
Obama's remark reflected figures from a recent study by Families USA, a consumer health advocacy group, published a May 2009 study called "Hidden Health Tax: Americans Pay a Premium."
While his remark accurately reflected the effects of uninsured care, his characterization of the cost as a "hidden tax" is a figure of speech to describe an unwanted charge. It is not a tax, but a cost shift.
"In 2008, the uninsured received $116 billion worth of care from hospitals, doctors, and other providers," the study said. About $42.7 billion was "unpaid and constituted uncompensated care."
"To make up for this uncompensated care, the costs were shifted to insurers in the form of higher charges for health services. These higher charges are then passed on to families and businesses as higher premiums."
Obama mentioned $1,000 per year, leaving an impression each individual with insurance pays the cost.
The study made clear that the calculation was for families, not individuals: "The impact of this hidden health tax on annual premiums for families and individuals in 2008 was as follows: For family health care coverage, the hidden health tax was $1,017. For health coverage provided to single individuals, the hidden health tax was $368."
Robert Zirkelbach, spokesman for America's Health Insurance Plans, said Obama's statement is accurate and pointed to the Families USA study.
"We're already spending $50 billion a year to provide care for uninsured Americans," said Zirkelbach, whose national association represents nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans. "We're doing it in the most expensive way possible, through the doors of the emergency rooms."
The Verdict:
True, but incomplete. Obama may have incorrectly left an impression individuals are paying a "hidden tax" of $1,000 per year for the care of others. And it's technically not a tax.
