Medicare Cost Greater For Once-Uninsured, Study Says

By GINA KOLATA The New York Times

Published: Jul 12, 2007

When uninsured adults with common chronic illnesses became eligible for Medicare, they saw doctors and were hospitalized more often and reported greater medical expenses than people who had had insurance.

And their increased use of medical services continued until at least age 72, researchers are reporting this week.

Their study, published in The New England Journal of Medicine, is one of the first to follow a large group of people through that crucial time of transition from being ineligible for Medicare to receiving Medicare benefits.

Its researchers, led by John Z. Ayanian, an associate professor of medicine and health care policy at Harvard Medical School, used data from the Health and Retirement Study, federally financed research that included 9,760 adults who were 51 to 61 in 1992. Ayanian and his colleagues focused on 5,158 of them who survived to age 65 by 2004 and who either had private insurance or no insurance before receiving Medicare.

The participants were interviewed and surveyed about their health and medical care every two years until 2004. That allowed the Harvard researchers to ask what happened when people who had not had insurance suddenly could have their health care paid for by the federal government.

The effect that emerged, a surge in the use of health care by those who previously were uninsured, was concentrated in people with cardiovascular disease or diabetes. Those are conditions, the investigators noted, in which treatment can prevent serious consequences that can require extra doctor visits, hospitalization and expense. In the study, 2,951 of the 5,158 participants had one of those conditions.

When such previously uninsured people became eligible for Medicare, they had 13 percent more doctor visits, 20 percent more hospitalizations, and reported 51 percent greater medical expenditures than those with the same diseases who had had insurance all along.

Although the findings made sense, said Jonathan Skinner, an economist at Dartmouth College, they were not a foregone conclusion.

"You might expect that if you fall into habits of not using much health care, you might continue not to use it," Skinner said. Instead, the study found a sort of pent-up demand among the uninsured.

"It shows how unfair our system is," said Louise Russell, a research professor at the Institute for Health at Rutgers University in New Brunswick, N.J. "These people were not getting care, and they were at least as in need of it as the people who were insured."

The study also shows that it may be less expensive than expected to provide universal health insurance, Ayanian and his colleagues concluded. Medicare is bearing the brunt when uninsured people put off seeing doctors or seeking medical care until they turn 65.