Who’s Responsible for Decreased Health Care Spending?

A recent study explored whether there is a relationship between the healthcare spending of uninsured individuals – sorted by citizenship status – prior to and during the Great Recession using the Medical Expenditure Panel Survey (MEPS) database. Noncitizens were further divided into those in the U.S. less than or equal to 5 years or >5 years.

The study found a statistically significant association between uninsured noncitizens more often having no health care spending at all compared to their citizen counterparts. There was a statically significant association for uninsured noncitizens (<=5yr) reporting an estimated 27% increased health care spending during the recession if they incurred any spending in health care at all.

The study also found that the demand for prescription drugs was somewhat elastic, whereas the emergency department visits, inpatient hospitalizations and physicians visits were mostly inelastic (that is, unrelated to cost).

Since the net result was that during the recession of 2009 there was that decrease in healthcare expenditures in the population at large, and this decrease is a combination between the spending of citizens and noncitizens alike, these data suggest that insured citizens may be in part responsible for the decreased spending. The data also suggest that some noncitizens that are uninsured (e.g. those in the country >5 years) may be withholding essential health services and follow-up.

An important limitation of this study is that while MEPS records health insurance status and citizenship/residency status, it is unable to independently identify undocumented immigrants.

This study welcomes a conversation about whether it is cost-effective to have a significant number of the population uninsured. Looking forward, it is important to consider within the current economic and political landscape what is the feasibility of offering health insurance coverage, if any, to recent immigrants – particularly the undocumented.

commentary by Maria Portela Martinez

Abstract

Objective. We study the association between the timing of the Great Recession (GR) and health spending among uninsured adults distinguishing by citizenship/nativity status and time of U.S. residence. Data Source. Uninsured U.S. citizens and noncitizens from the 2005–2006 and 2008–2009 Medical Expenditure Panel Survey. Study Design. The probability of reporting any health spending and the natural logarithm of health spending are our main dependent variables. We compare health spending across population categories before/during the GR. Subsequently, we implement two-part regression analyses of total and specific health-spending measures. We predict average health spending before/during the GR with a smearing estimation. Principal Findings. The probability of reporting any spending diminished for recent immigrants compared to citizens during the GR. For those with any spending, recent immigrants reported higher spending during the GR (27 percent). Average reductions in total spending were driven by the decline in the share of the population reporting any spending among citizens and noncitizens. Conclusions. Our study findings suggest that recent immigrants could be forgoing essential care, which later translates into higher spending. It portrays the vulnerability of a population that would remain exposed to income shocks, even after the Affordable Care Act (ACA) implementation. PMID: 24962550 Vargas Bustamante, A and Chen, J. HSR. 2014; epub.