Out-of-Pocket Spending Analyses

After the recent JP Morgan report on out-of-pocket spending, the Kaiser Foundation, through its Petersen-Kaiser Health System Tracker issues a couple of briefs analyzing the same topic.   (KFF Brief) (KFF Brief)     The first looks at general trends.  The average deductible for people with employer-based insurance rose from $303 in 2006 to $1505 in 2017.  Some of that may have been offset by slower growth in premium contributions.  As deductible level has risen, so has actual spending under the deductible, while at the same time copayment spending has declined, since a service has to be past the deductible level before there could even be a copayment.  Using a large commercial claims database, the authors find that in the ten years from 2005 to 2015 (okay, I know, that is actually 11 years!), wages rose 31%, spending under deductibles rose 229%, spending on coinsurance rose 89%, spending on copays fell by 36% and total patient cost-sharing rose 66%.  Payments by health plans rose only 56%, so patients were picking up an increased share of total health spending.   Although the average spending under a deductible was a surprising low $386, that is because, like all health spending, the range is wide and the spending is concentrated at the high end.  The top 15% of health spenders had an average of $2766 in total cost-sharing payments, including $1006 in deductible spending.  These people accounted for 75% of all health spending.

The second brief focuses on those people with high total out-of-pocket spending.  Using a figure of $1000, in inflation adjusted dollars the percent of commercial enrollees with that level of spending or more rose from 17% in 2005 to 24% in 2015.  In 2015, 12% of these enrollees had out-of-pocket spending over $2000.  18% of people had no out-of-pocket spending and 62% had spending under $500.  About 60% of high out-of-pocket spenders were women.  And, as would be expected, older enrollees tend to have more out-of-pocket spending, with twice as many people over 60 in that category as people in their 30s.  Out-of-pocket spending is highest for disease of the blood organs, congenital anomalies, digestive disorders, cancer, circulatory issues and mental illness.  Typical out-of-pocket spending for common cancers ranged from $1300 to $2400.  Chemotherapy and radiation treatments were particular contributors to very high out-of-pocket spending.  In some ways, these briefs don’t paint as dire a picture of out-of-pocket spending as might be expected.  But for a few patients, this clearly is a significant burden.  And the report doesn’t compare income level to spending, as the JP Morgan report did.  Lower income people are obviously much more significantly burden by health spending.