November 30, 2006
Contact: Tony Wyche (314) 361-4774 or tonywyche@soapbox-pr.com
314.345.5500 office

New Missouri Foundation for Health Study Details Missouri's Looming Crisis of Uninsured Health Care Costs

MFH report shows costs of health care for uninsured Missourians may soon exceed the State's ability to pay

St. Louis -With political forces in Jefferson City poised to debate how to address health care needs for Missourians who lack health insurance, a new report released today by the Missouri Foundation for Health sheds light on the costs of providing health care to the uninsured and the potential budget crisis the state may face in dealing with these costs.

The report, titled "Data Book 2: The Cost of Care for Missouri's Uninsured," should be of particular interest to newly elected and returning members of the Missouri General Assembly, who will be responsible for replacing Medicaid, the health care system for the lower-income in Missouri, by June 2008.

"This report highlights a looming crisis in our state," said Dr. James Kimmey, President and CEO of MFH. "As the Governor and members of the Missouri legislature assemble in Jefferson City a few weeks from now to address the future of Medicaid in Missouri, I hope they will make use of the information we have prepared to support fully informed decisions in the best interests of our citizens."

Among the key findings in the report is that in 2005 the cost of providing health care to uninsured Missourians ranged from $666 million to $753 million, while public sector revenue available to cover these costs was approximately $723 million. About 76 percent of these revenues came from the federal government.

In 2005, the revenues in the system to support care to the uninsured were roughly sufficient to cover the costs of the care they receive. However, of greater importance to incoming members of the Missouri legislature may be the report's finding that in the very near future the cost of providing health care to the uninsured is likely to exceed the public funds available to do so. There are two main reasons for this:

" The costs associated with providing health care to the uninsured are higher than costs associated with providing health care to those with insurance. The higher cost of providing health care to the uninsured stems, in large part, from the fact that the uninsured live sicker than those with insurance. They forego preventive care and seek health care at more advanced stages of disease, as they are often forced to choose between visiting a doctor and paying for other needs like food or housing.

" Recent cuts to the Medicaid program in Missouri will increase the number of uninsured citizens in the state. The MFH study found that reducing the number of Missourians eligible for Medicaid will increase the demand for uncompensated care - health care provided to the uninsured by hospitals, physicians, clinics, and others without payment by the patient. Simultaneously, available uncompensated care subsidies - funding made available to these providers from Medicaid, Medicare, federal and state grants, and other government sources to offset the costs of providing uncompensated care to the uninsured - are unlikely to keep pace with the increased demand for services.

"In some ways, this is a simple economic equation," said Leslie Reed, MFH Vice President for Health Policy. "If the cuts in Medicaid enrollment stay intact or are deepened, then the demands placed on the health care system by Missourians without health insurance will quickly begin to exceed the supply of funds available to address their health care needs.

"If Missouri were to consider expanding its current eligibility rules for coverage, it is possible that some of the current expenditures on behalf of the uninsured could be redirected to cover such new Medicaid costs. But if Missouri continues to cut back on public coverage, the number of uninsured in the state will continue to grow. Correspondingly, the demand for uncompensated care by the uninsured will increase as will the need to provide further subsidies for these costs. That certainly puts the state at risk for a fiscal crisis as it tries to deal with the costs of providing care to the uninsured."

The report is the most recent publication of the MFH's "Cover Missouri Project," which looks at the strengths and weaknesses of the current health care system in Missouri and explores options for decreasing the number of uninsured. The report was prepared by Stephen Zuckerman, PhD, Randall R. Bovbjerg, JD, Jack Hadley, PhD, Matthew Cravens, BA, and Lisa Clemans-Cope, PhD, of The Urban Institute. An executive summary and a copy of the full report are available at the MFH web site.

[Note to members of the media: copies of the executive summary and/or the full report can be e-mailed to you. Contact Tony Wyche via telephone at 314-361-4774 or via e-mail at tonywyche@soapbox-pr.com.]

# # #