Insured people pay 'about $2,000' for uninsured hospital stays, Florida chamber says

The Florida Chamber of Commerce is weighing in on the state’s rising cost of health care, decrying the Affordable Care Act’s plans to expand Medicaid, but acknowledging uninsured residents cost big bucks.

A chamber task force on Jan. 13, 2015, released a seven-point plan entitled "Smarter Healthcare Coverage in Florida," ahead of a potential fight among state lawmakers about how to cover the uninsured; Florida’s annual legislative session starts March 3. The group made it pretty clear they don’t endorse President Barack Obama’s health care law, calling it "a bureaucratic malaise that is taxing Americans and making our country less competitive" by shifting costs to businesses and taxpayers, and forcing up insurance premiums.

They do acknowledge that Florida having the second-highest number of uninsured residents is a problem that needs fixing.

"Floridians pay an additional $1.4 billion in hidden health care taxes to cover health care received by the uninsured," the report read. "Insured Floridians pay about $2,000 for every hospital stay to cover the cost of the uninsured."

Making insured residents pay an extra $2,000 per hospital stay piqued our interest, because that’s a hefty add-on to already high medical bills. We wondered whether it was a true expense, or if the chamber was just padding its own invoice.

Footing the bill

The chamber’s report said 3 million Floridians don’t have health insurance. The group told us it used Kaiser Family Foundation data that showed there were about 3.6 million. An estimate using Census data said about 3.8 million of Florida’s 19 million residents were uninsured in 2013. That same report ranked Florida second in the nation in uninsured residents. We’ve explored this topic before, and found Florida was third in its percentage of uninsured, behind Texas and Nevada.

Calculating how much those uninsured Floridians cost other patients is not the easiest leap to make. We asked several state, medical and insurance agencies whether the number was accurate or not, and no one had a statistic measured in such a way.

The chamber told us they collected data from "an urban hospital" and tracked that unspecified facility’s cost-to-charge ratio. That’s a measure of how much care actually costs a hospital to provide versus how much they would charge a patient, and can vary from hospital to hospital.

The chamber then divided the uninsured procedures’ costs by the total number of admissions through managed-care insurance plans. After adjusting for accounting discrepancies and other factors, the chamber determined the cost was about $2,300 per patient.

To account for cost differences between the kinds of patients other hospitals would admit and the type of care they receive, they estimated a lower end of the range at $1,700, or about 75 percent of the first estimate. The chamber acknowledged setting this low end was a "somewhat arbitrary determination."

The description of "about $2,000" was meant to be an average of this range, chamber spokeswoman Edie Ousley told PolitiFact Florida.

"There will be, of course, individual hospitals (that) cost shift and some cost-shifting less per insured patient," Ousley said. "The intent of the calculation was to take real data from a representative hospital and try to provide an order of magnitude of the cost shift of the uninsured."

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The chamber said in its plan there were $1.4 billion in unpaid hospital expenses in 2012, a number that jibes with a Florida Hospital Association report that said in 2012, state hospitals spent $1.4 billion in "charity care" (the same as it was in 2011).

To put that in perspective, the Agency for Health Care Administration reported more than $119 billion in charges for all hospital admissions in 2012. The average stay was about five days and cost more than $44,500.

Charity care is defined as "free or discounted health services provided to people who meet hospitals’ criteria for financial assistance." It doesn’t include bad debt, uncollected charges or differences in treatment costs versus what a government program pays.

FHA President Bruce Rueben has said he hoped "there will be inroads" to lowering that number in future reports, when people newly insured under the Affordable Care Act are taken into account. The federal insurance exchange didn’t open until Oct. 1, 2013, with policies starting in 2014, so data on how that affects charity care aren’t available.

In any event, patients with insurance do end up paying for people who are not covered.

Linda Quick, president of the South Florida Hospital and Healthcare Association, said she had heard the Chamber’s number used before, but wasn’t aware of how it had been calculated. Nonetheless, it’s an estimate that is rooted in a real problem, she said.

"I think the underlying premise, those who do pay, pay for those who can't/don't is true," she told PolitiFact Florida via email, "although the ‘cost shifting’ had become more burdensome before the Affordable Care Act and the availability of affordable coverage."

If Florida fully implemented the health care law, it would reduce the ranks of the uninsured. The pro-expansion Florida Center for Fiscal and Economic Policy estimates about 1 million people would be covered under the Medicaid expansion by 2020, while the Kaiser Family Foundation said about 1.3 million people now qualify under the Affordable Care Act for subsidies to help them pay for private insurance.

The Kaiser study said some 764,000 Floridians would fall into a coverage gap created when they earn too much to get Medicaid coverage, but not enough to get those subsidies. The rest either must buy their own insurance, are children covered by another program or are ineligible because of their immigration status.

Our ruling

The Florida Chamber of Commerce said, "Insured Floridians pay about $2,000 for every hospital stay to cover the cost of the uninsured."

That number is based on an estimate the chamber developed in-house, calculating an average based on an unspecified "urban hospital" using the most recent data. There’s no way to tell just how accurate that estimate is, since it makes plenty of assumptions on actual costs. It also doesn’t take into account how much the Affordable Care Act will change the data, since the requirement for the uninsured to have policies didn’t kick in until 2014.

Experts we talked to said there are problems with the chamber’s number, but it’s a somewhat reasonable illustration to a real problem in Florida: People who are insured end up paying for those who aren’t.

The statement is partially accurate but leaves out important details or takes things out of context. We rate it Half True.