History

President Ronald Reagan signed the Consolidated Omnibus Budget Reconciliation Act of 1985. One of the provisions was the Emergency Medical Treatment and Active Labor Act. The EMTALA requires hospitals to treat life threatening conditions regardless of citizenship, legal status, or ability to pay.

Example Scenario

This scenario applies to illegal immigrants, lower income individuals, and anyone uninsured:

1. A patient enters a hospital with a life threatening condition.
2. The hospital is required by law to accept the patient and provide life saving care.
3. The hospital attempts to collect payment through the patient’s insurance.
4. If the patient does not have insurance, the hospital attempts to collect payment from the patient directly.
5. If the patient cannot pay directly and does not have insurance, the hospital writes the treatment expenses off as a charitable donation.

The Aftermath

The patient is forced into bankruptcy if: they cannot pay out of pocket, they have no insurance, or their insurance company refuses to pay. Approximately 62% of personal bankruptcies in America are caused by medical-related expenses. The study in the previous link has some caveats, which are explained here.

Charitable donations decrease the hospital’s profit margins over time. The hospital will eventually raise its prices for goods and services to stay profitable. The comptroller of Texas estimated the treatment of illegal immigrants cost $1.3 billion in 2006.

When hospital prices increase, health insurance companies are forced to reimburse more money for the same services. When a health insurance company sees an increase in treatment payouts, it raises premiums for consumers.

Health insurance premiums increase regardless of consumer diet, exercise, smoking habits, and timely payments.

Reality Check

If you have health insurance you are already paying for illegal immigrants, the poor, and uninsured to receive emergency care – but you must jump through five hoops. Under the new health reform legislation, it takes fewer hoops.

References

• Emergency Medical Treatment and Active Labor Act
• Consolidated Omnibus Budget Reconciliation Act of 1985
• Rising health care costs put focus on illegal immigrants