Cost-sharing in Urban Areas

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.