What really matters to most Americans in regard to health care costs is how much they have to spend out of their financial resources, whether in premium sharing or cost-sharing at the time of service. And the prospect of paying significant cost-sharing is what causes financial anxiety for most people. Research in Health Affairs examines trends in cost sharing between 2007 and 2010, using a combination of MEPS survey data and other information sources. (HA Article) In 2010, out-of-pocket spending was $306.2 billion or almost 12% of all health expenditures. Consistent with an overall slowdown in health spending growth, from 2007 to 2010 out-of-pocket costs grew 1.4% on average per year, down from 5.3% average annual increases from 2004 to 2007. Among subgroups, however, the only one that experienced an increase were those persons with private health insurance. The uninsured saw a significant decline in their out-of-pocket spending (which by definition is most of their health care costs), as did Medicare and Medicaid recipients. In 2010, those with employment-sponsored insurance accounted for 43% of all out-of-pocket expenses and saw growth of 4.1% in those expenses, although from 2007 to 2010 the average annual increase was 2.4%. We know from other sources that out-of-pocket spending for this group has continued to rise since 2010, particularly as high-deductible plans spread. Although Medicare beneficiaries represent only 15.6% of the population, they incur 40% of out-of-pocket spending, although their per beneficiary spending has been flat the last few years. Finally, the Medicaid population, which is much larger than the Medicare one, has relatively low out-of-pocket spending and also has seen no increase in those costs.
