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Evan J. Lodes

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The Uninsured’s Hidden Tax on Health Insurance Premiums in California

by John F. Cogan, Matthew Gunn, Daniel P. Kessler, Evan J. Lodesvia Analysis
Sunday, April 1, 2007

The basic premise behindmany recent California health-care reform plans is that Californians who have health insurance bear a large part of the financial burden of the health-care services provided to the uninsured. Doctors and hospitals, by charging insured persons systematically higher prices for health-care services, shift the costs of treating the uninsured onto the insured. These higher charges cause higher health insurance premiums— California’s ‘‘hidden tax.’’ According to reform advocates, the hidden tax is so large that the reforms, which include mandates and new taxes, will actually reduce those premiums.