On September 22, the Urban Institute released a report that estimates that racial and ethnic disparities in a set of preventable illnesses including diabetes, hypertension, and stroke will cost $23.9 billion in 2009.  The report concludes that, in 2009, Medicare’s share will total $15.6 billion while private insurance will spend an additional $5.1 billion.  In addition, the report estimates that the total cost of the disparities will reach $337 billion by 2019 and increase by more than 50 percent by 2050 as the American minority population increases.  

From the executive summary:

The reduction or elimination of racial and ethnic disparities in health has long been a goal of policymakers concerned with equity. An often overlooked point, however, is that excess rates of disease impose cost burdens on public programs as well as individuals and other purchasers of private health insurance. The analysis presented in this policy brief estimates the magnitude of current cost burdens both nationally and for several large states for a select set of preventable diseases. We estimate that in 2009, disparities among African Americans, Hispanics, and non-Hispanic whites will cost the health care system $23.9 billion dollars. Medicare alone will spend an extra $15.6 billion while private insurers will incur $5.1 billion in additional costs due to elevated rates of chronic illness among African Americans and Hispanics. Over the 10-year period from 2009 through 2018, we estimate that the total cost of these disparities is approximately $337 billion, including $220 billion for Medicare. We also estimate the impact on these costs of the dramatic changes in the demographic profiles of African Americans and Hispanics that have been projected over the coming decades. We find that even without taking into any account projected growth in per capita spending, these annual costs will more than

double to $50 billion by 2050 as the representation of Latinos and African Americans among the elderly increases. 

 

Full report: Estimating the Cost of Racial and Ethnic Health Disparities (PDF | 76.14 KB)

The Urban Institute. (2009). Estimating the Cost of Racial and Ethnic Health Disparities. Waidmann, T.