Out-of Pocket Spending

While understanding the concentration of overall health spending is important and useful, what is most important for consumers is how much they are paying.  The last in our current look at recent Agency for Healthcare Research & Quality statistical briefs is one that focuses on out-of-pocket spending for health care.  Note that for this brief, such spending does not include any premium contributions, so for most people with private insurance, and many on Medicare, there is a substantial amount that goes to that.  Cost sharing for this brief includes copays, deductibles, coinsurance and self-pay.   (AHRQ Brief)   As we have noted in the earlier commentary, 15% of people had no health spending in 2014.  Among the 85% who did, the average annual out-of-pocket expense was $688, but as with all figures in this brief, that average masks a very skewed distribution, with a few people with high spending pulling up the mean.  The median was a much more modest $204.  Out-of-pocket spending, similar to total spending, rises with age, despite near universal coverage of people over 65 due to Medicare.  For people over 65 mean out-of-pockets were $1253.

15% of all people paid nothing out-of-pocket for health care, but only 3% of the over-65 group did.  18.5% of the population had over $1000 in out-of-pocket spending and 8.4% $2000 or more.  But again, 35% of the elderly were in the over $1000 category and 17% in the over $2000 one.  People with higher household income had higher out-of-pocket spending.  People with incomes below or just above the poverty line had an average of $428 in out-of-pockets, but a median of only $39; while the high income group averaged $887, with a medical of $367.  32.4% of people in poor or near poor households had no out-of-pocket spending compared to only 6.7% in high-income households.  The uninsured had an average of $752 in out-of-pocket spending, while those with private coverage averaged $656.  For adults over 65, Medicare-only coverage status resulted in a mean $1231, while being a dual eligible meant an average of only $427.  About half of people on Medicaid had essentially no out-of-pocket health care spending.  Something wrong with that picture.