How Hospitals Handle Uninsured Patients: The Financial Burden of Emergency Care

In 2024, around 26 million people, or 8% of the population, of all ages were uninsured. Main reasons for this involve the demanding cost of healthcare —where the average annual premium for single coverage is $8,951 or $25,572 per year if you have a family. As insurance coverage continues to increase as you age, these costs are overwhelming for many. 

However, enacted in 1986, the Emergency Medical Treatment & Labor Act (EMTALA) “ensures public access to emergency services regardless of ability to pay.” When the Affordable Care Act was passed, which is also known as ‘Obamacare’, it had extended healthcare coverage for the uninsured with its improvements in affordability among the low income. Since its passage, Obamacare has cut the U.S uninsured rate nearing in half, reducing disparities in both coverage and their access to sufficient care. 

But who bears the cost for caring for these patients? The government, including federal, state, and local, contribute significantly to uncompensated care, if hospitals support a large number of low-income and uninsured patients through Disproportionate Share Hospital (DSH) Payments. Although Garwaite, a Professor in Hospital and Health Services, claims it is not enough to offset hospital costs. People speculate that hospitals engage in the phenomenon known as “cost-shifting” where hospitals increase prices to private insurers to compensate for lower public payer payments. This is a widely debated topic as some argue the extent to which cost shifting would be viable, as hospitals are more likely to cut costs than increase them.

We now circle back to the patients themselves, who struggle with paying back hospital bills daily. In 2024, over 100 million Americans owe $220 billion in medical debt, leading to rejected positions based on low credit scores, inability to borrow money, significant emotional and physical distress. Uninsurance is strongly correlated with the risk of expecting Catastrophic health expenditures (CHE). As defined by the World Health organization, CHE’s are when out-of-pocket payments are greater than 40% of one’s capacity to pay for healthcare, often the cost associated with the remaining balance of basic necessities like food, shelter, and utilities. 

But what really can we do? Volunteer to organizations that play a role in providing affordable healthcare like Community Health Centers, typically located in medically underserved urban areas. Educate those who are not familiar to how lack of healthcare insurance significantly impacts a person or family’s well being. And last by not least, Advocate by sharing personal stories, contacting local new outlets, contacting local representatives, or by simply using social media to spread the word about the need for affordable healthcare. We can all make a difference and it starts with YOU. 

References

August, J. (2024). Healthcare insights: How medical debt is crushing 100 million Americans. Cornell University ILR School. https://www.ilr.cornell.edu/scheinman-institute/blog/john-august-healthcare/healthcare-insights-how-medical-debt-crushing-100-million-american 

Centers for Disease Control and Prevention (CDC). (2024). Health insurance coverage: Early estimates for 2024. National Center for Health Statistics. https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur202412.pdf