Cost-sharing in Urban Areas

By September 8, 2017 Commentary

The Health Care Cost Institute uses data from 2012 and 2015 for employer-sponsored health insurance plans covering those under age 65 to evaluate trends in cost-sharing for patients.   (HCCI Report)   In 2012 average per capita spending for this group was $4653 and in 2015 it was $5141, a 3.4% annual growth rate.  The difference between the lowest and highest spending area was 67% in 2015.  The highest spending was in Dallas, at an average of $6126, followed by New York City and Houston.  The lowest was in Tucson at $3674, and Buffalo and Rochester, New York were also low-spending.  Average out-of-pocket spending per person was $751 in 2012 and $813 in 2015, an annual increase of only 2.7%.  Dallas, Jacksonville and Augusta, Georgia had the highest average out-of-pocket spending and Tucson had the lowest, which was 61% lower than Dallas’.  There tended to be little change in the ranks of either high or low total spending and out-of-pocket spending areas between 2012 and 2015.

There was not a lot of overlap among high total spending and high out-of-pocket spending regions.  You might expect that where there is high out-of-pocket as a percent of total spending, total spending would be lower.  Out-of-pocket spending was 16.1% of the total in 2012 and 15.8% in 2015.  The cities with the highest proportion of consumer cost-sharing were Lexington, Kentucky and Augusta.  Those with the lowest were New York City and Washington, D.C.  (Credit those great federal employee health plans!)  29% of this population was in a high-deductible plan in 2015, but there was no clear relationship between the proportion of the population in an HD plan in a region and the level of out-of-pocket spending.  Some areas with high HD enrollment and low consumer cost-sharing and vice versa.  If a city had more people who did not file any claim with their health plan during a year, however, that was related to lower out-of-pocket spending.  Further to my belief that most people don’t need health insurance, as it is currently designed, between 20% and 30% of all enrollees in these 40 areas did not file any claim.  This study suggests that out-of-pocket spending is growing more slowly than total spending, which is a good thing.  For most people, even the current average amount would be a heavy burden, and since so many enrollees file no claims, for those that do, the average cost-sharing must be much higher.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at

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