The cost effectiveness of health insurance.
BACKGROUND
Although studies have examined both the adverse consequences of lacking health insurance and the costs of insuring the uninsured, there are no estimates of the value of providing health insurance to those currently uninsured.


OBJECTIVE
To examine the value associated with providing insurance to those currently uninsured through an incremental cost-effectiveness analysis.


METHODS
People aged 25 to 64 in both the National Health Interview Survey (with 2-year mortality follow-up) and the Medical Expenditure Panel Survey were examined to estimate the contribution of sociodemographic, health, and health behavior characteristics on insured persons' quality-adjusted life years (QALYs) and healthcare costs. Parameter estimates from these regression models were used to predict QALYs and costs associated with insuring the uninsured, given their characteristics for 1996. Markov decision-analysis modeling was then employed to calculate incremental cost-effectiveness ratios.


RESULTS
The incremental cost-effectiveness of insurance for the average 25-year-old adult (through age 64) is approximately $35,000 per QALY gained (range $21,000 to $48,000). The incremental cost-effectiveness ratio becomes more favorable as people approach age 65.


CONCLUSIONS
The additional health care purchased with health insurance provides gains in quality-adjusted life at costs that compare favorably to those of other programs and medical interventions society now chooses to fund.
Muennig
Peter
P
Department of Health Policy and Management, Mailman School of Public Health, Columbia University, New York, New York, USA. petermuennig@yahoo.com
Franks
Peter
P
Gold
Marthe
M
D000328:Adult; D003362:Cost-Benefit Analysis; D006801:Humans; D007348:Insurance, Health / Q000191:economics*; D017057:Medically Uninsured; D008875:Middle Aged; D011788:Quality of Life