A new study shows health care costs significantly drop when the poor have health insurance, lending new support to the benefits of the controversial Affordable Care Act.Between 2006 and 2007, a research team tracked 26,000 previously uninsured Richmond, Va. residents whose household incomes fell 200 per cent below the federal poverty level (now $22,340 in 2012).
In short, each participant would qualify for health care under the Affordable Care Act, which is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014.
Each participant was given health insurance and researchers tracked their spending for the next three years.
“The study found that primary-care visits for patients who enrolled continuously over three years rose from 1.06 in year one to 1.60 annually, while emergency-room visits fell from 1.02 in year one to 0.74 by year three,” says David Neumark, a professor at UC Irvine and co-author of the report.
It’ll take a few more years to get really conclusive results, but so far the results have shown that average health costs for each enrollee dropped by nearly 50 per cent over the study period – from $8,899 in the first year to $4,569 in the last.
“A lot of the debate about healthcare reform surrounds the issue of whether we’re setting up something that’s going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services,” Neumark says.
But increased use of primary care will lead to fewer emergency room visits and hospital admissions, decreasing costs, he adds.
As it stands, 50 million Americans are living without health insurance while health care costs rise at a rate of 7 per cent each year.
The full details of the report, “Lessons For Coverage Expansion: A Virginia Primary Care Program For The Uninsured Reduced Utilization And Cut Costs,” can be found in the February 2012 issue of Health Affairs.