It’s no secret that the cost of health care is steepest for the uninsured. For years, the reality has been that without private companies or the government negotiating for more favorable rates, the uninsured have been stuck paying the sticker price for care. A 2007 study in Health Affairs, a leading policy journal, found that hospitals charged the uninsured 2.5 times more than what health insurers paid and more than three times more than Medicare’s allowable costs.

But thanks to legal settlements by two major Illinois hospital systems, it just got a bit easier for the uninsured to receive affordable care in Illinois. The Tribune’s Judith Graham explains:

In a move with far-reaching ramifications for people without health insurance, two large Illinois hospital systems have agreed to settle lawsuits alleging that they over-charged tens of thousands of uninsured patients and provided inadequate financial assistance. [...]

As part of the agreements, Resurrection Health Care and Advocate Health Care are offering to recalculate patients’ bills and give refunds to needy patients eligible for free or discounted medical care. Resurrection will also extend a discount of 25 percent to anyone who is uninsured regardless of his or her income level – a move that is thought to be unprecedented in Illinois.

These settlements are the first of their kind in Illinois and among only a handful to occur nationwide. As a press release from the law firm Mehri & Skalet pointed out yesterday, a great deal of credit goes to the American Federation of State, County, and Municipal Employees (AFSCME), who "identified the problems several years ago and provided much of the original research that spurred the lawsuit."

Notices explaining the situation were sent out to 220,000 Resurrection patients and 170,000 Advocate patients, which suggests that a considerable number of people stand to benefit.  Aside from recouping loses, uninsured patients using the Resurrection system are also subject to broader discounts starting this week. First, the system is placing annual limits on what the uninsured will be asked to pay for hospital services in any given year. These will be ever more generous than the markdowns provided via legislation passed last year despite a governor’s veto. And on a sliding scale, the poor and working poor will be provided care at heavily reduced prices for every visit. Graham provides the specifics:

People who earn up to 100 percent of the federal poverty level ($10,400 for an individual, $21,200 for a family of four) will get free care; those between 101 and 200 percent of poverty will get discounts of 80 percent; those between 201 and 300 percent of poverty will get discounts of 60 percent; and those between 301 and 400 percent of poverty will get discounts of 40 percent.

While none of these changes are equal substitutes for universal insurance, they will certainly help vulnerable people during these tight economic times, and that’s a good thing.

Images used under a Creative Commons license by Flickr user KFerguson.