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It may cost millions to provide government health insurance to poor children - but it's more expensive not to cover them, a new study asserts.
In fact, the lack of insurance costs society an annual $2,121 more in health care costs per child, it found.
Published in this month's Pediatrics journal, the research showed that cutting back on subsidized insurance programs forces poor children to bypass doctors' offices for more expensive emergency room care and leads to longer hospital stays.
While the findings are based on children in Arizona, the results apply to Utah, said Richard Butler, the Brigham Young University professor of economics who co-authored the report.
"It turns out [restricting insurance coverage] is a false savings. The total cost to society increases when they're disenrolled," Butler said.
Those in the health-care industry have generally known that poor, uninsured children are more likely to go to an emergency room - where they can't be turned away for lack of coverage - and that they tend to stay in hospitals longer because their conditions are worse by the time they see a doctor.
Butler said his study - co-authored with Arizona State University researchers - quantifies the shift in treatment and the actual costs.
David Sundwall, executive director of the Utah Department of Health, said the research should help him persuade the state Legislature to put more money toward the Children's Health Insurance Program (CHIP), which provides poor children coverage through federal and state subsidies.
He said Gov. Jon Huntsman Jr.'s goal is to cover all Utahns who do not have insurance, starting with children.
"There's that general impression there is misuse of emergency rooms. Those generalities could be buttressed by the study," Sundwall said. "That's great information."
No additional children have been able to enroll in CHIP since September because the Legislature hadn't provided the needed funds until earlier this year, when it allocated an additional $4 million. That will enroll up to 12,000 more children, starting in July.
Sundwall expects to ask for around $4 million more for CHIP, though the number could change since the ranks of the uninsured have soared, shocking even his office. The number of uninsured children rose by 18,000, or 26 percent, from 2005 to 2006.
Knowing that those uninsured children create $2,121 more in health-care costs "confirms what we've already known," Sundwall added. "We're paying for these uninsured all along. It's just cost shifting.
"It isn't cost-effective to have uninsured among us."
Society pays the price, Butler noted.
"We pay it through higher taxes. Most of those costs come out of federal subsidies to hospitals. If it's a for-profit hospital, it comes out of some of the shareholder value."
The researchers tracked health-care transactions of 43,000 uninsured children and 169,000 children with Medicaid or CHIP coverage in the Phoenix area in 2004. The study quantified how much more often the uninsured visited hospitals, and the longer period of their stays. It also calculated the costs of such visits.
Researchers wanted to know what happens when such poor children become uninsured, because many states make changes to their subsidized health insurance programs that reduce the number of insured residents.
Those changes range from increasing premiums to capping enrollment, as Utah has done.
Karen Crompton, executive director of Voices for Utah Children, has estimated that Utah's CHIP has been closed to enrollment almost half the time since it was established in 1998.
At the same time, the state has had millions of dollars - $38.8 million as of September - in unspent federal dollars for CHIP.
She said it costs the state $25 a month per child for CHIP coverage.
"While solving the total health-care-system problem in our state and our country may be very complex and difficult, covering kids is pretty simple," she said.
The Children's Health Insurance Program (CHIP) is the state health insurance for children. Utah children qualify for CHIP based on family income and size. Children also must be younger than 19, U.S. citizens or legal residents, and not covered by other insurance.
Source: health.utah.gov