HCP’s J. Michael McWilliams, MD, PhD; Ellen Meara, PhD; Alan M. Zaslavsky, PhD; and John Z Ayanian, MD, MPP, collaborated to publish “Medicare Spending for Previously Uninsured Adults,” released early online with the October 6, 2009 issue of the Annals of Internal Medicine. They compared Medicare spending after age 65 for adults who were uninsured in their 50’s and early 60’s with those who had continuous coverage before reaching Medicare eligibility.  Between ages 65 and 74, previously uninsured adults cost the Medicare program about $1,000 more annually than previously insured adults, even after the researchers adjusted for numerous socioeconomic and health factors reported by insured and uninsured adults before 65. The spending differences were largely explained by higher rates of hospitalization among the previously uninsured for complications related to cardiovascular disease and diabetes, which can often be avoided with effective preventive care.  Previously uninsured adults were also more likely to be hospitalized after age 65 for knee and hip replacements, suggesting they delayed these procedures for severe arthritis until after they gained Medicare coverage.

These findings have important implications for the national health care debate.  The authors calculated that universal coverage for all adults who are currently over the age of 50 would cost society $197 billion in increased health care use before 65.  But this increase in spending would be partially offset by a subsequent decrease of $98 billion in Medicare spending after age 65.  As Congress examines the merits and costs of various health care reform proposals, these findings suggest substantial economic benefits of covering the uninsured that have not been fully considered in ongoing discussions of health care reform.  As the authors conclude, “these benefits suggest that health insurance coverage for uninsured adults… would be a more valuable investment for the United States than previously thought.”

For more information, please read the full study, media coverage by The New York Times, an issue brief by The Commonwealth Fund which funded this research, the Harvard Focus (see the research brief entitled-- "Lack of Insurance Leads to Higher Medicare Bills"),and the press release by Harvard Medical School.