by Jacqueline Renfrow | May 23, 2019 7:15am
Healthcare
costs are consuming a large share of income for many Americans, according to a
new study.
Researchers at the
Commonwealth Fund examined out-of-pocket spending totals for people with
private health insurance and found a large portion of the country was
spending 10% or more of their household income on insurance costs.
The report examined U.S. census data between 2016 and 2017 and found that 13.3 million people spent 10% or more of their incomes on premiums. Another 6.2 million people spent 10% or more of their income on out-of-pocket costs. Combined, 4.1 million people were faced with high premiums and high out-of-pocket costs relative to their income.
The report examined U.S. census data between 2016 and 2017 and found that 13.3 million people spent 10% or more of their incomes on premiums. Another 6.2 million people spent 10% or more of their income on out-of-pocket costs. Combined, 4.1 million people were faced with high premiums and high out-of-pocket costs relative to their income.
The
average household spent $2,200 annually on insurance premiums, while some spent
more than $8,000. And while the median out-of-pocket expenses were $800, some
families spent more than $5,000 annually. Combined, the median out-of-pocket
cost for an American was $3,700. Still, some households spent as much as
$12,080.
“It is
striking to see the number of people with employer plans—nearly 24 million—who
were living in households that spent a large share of their income on premiums,
out-of-pocket expenses, or both,” Susan Hayes, a senior researcher at the fund,
told FierceHealthcare. “It is also striking to see the vast range of dollar
amounts (from zero to several thousand) that families, all of whom have
employer coverage, spent on premium contributions and out-of-pocket costs.
Costs for employer coverage are not experienced equally, whether across the
country or within the same state.”
Geography
was a large factor in how much of income was spent on healthcare. In large,
incomes tend to be lower in the South and West, meaning a substantial portion
of income was more likely spent on healthcare.
Specifically,
Arkansas, Florida, Louisiana, Maine, Mississippi, Nevada, North Carolina and South
Dakota had the largest percentages of people who spent at least 10% of their
income on premium contributions. On the flip side, Alaska, the District of
Columbia, Hawaii, Kansas, Oregon, Montana, Minnesota, New York, Rhode Island
and Washington had the smallest pool of people who spent at least 10% of their
income on insurance premiums.
The
states with the highest shares of people with high out-of-pocket costs include
Arizona, Arkansas, Idaho, Nebraska, North Carolina, Oregon, Utah and Wyoming.
Total
spending on premiums and out-of-pocket was lowest for people in Hawaii, about
$1,500 a year, and was highest for people in South Dakota, around $5,450.
Hayes
notes that while this analysis did not look at trends over time, other studies
show that incomes are not growing as fast as healthcare costs. In fact, a
previous analysis by two of the authors of this
brief found that the amount that employees contributed toward premiums for
their employer coverage grew faster than median income nationally and in most
states between 2008 and 2017.
“Income
growth is failing to keep pace with health care cost growth, leaving millions
of people in employer plans with unaffordable premiums, out-of-pocket costs, or
both. This makes it harder for people to maintain their coverage and get the
health care they need. Even small policy steps have the potential to make
health insurance and health care more affordable for U.S. families,” Sara
Collins, co-author of the study and vice president for healthcare coverage
and access at the Commonwealth Fund, said in a statement.
Authors
of the study suggest several policy options to reduce these costs for people
with employer coverage.
One
suggestion is to fix the family coverage glitch, which bases affordability and
access on a single-person plan rather than a higher-cost family policy. Another
suggestion is to raise the portion of medical costs that an employer plan is
required to cover. And to implement this plan, employers could be penalized for
not meeting the standards.
Moving
forward, Hayes said it would be interesting to look at the trend over time to
see the extent to which the amount workers report spending on care for
themselves and their families has changed.
"But
these data and other analyses make clear what many families already know
first-hand: that millions of people with employer coverage have unaffordable
premiums, out of pocket costs, or both," she added.
https://www.fiercehealthcare.com/payer/4-million-faced-high-premiums-out-pocket-costs-relative-to-income
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