Coverage that Doesn’t Cover It

As a medical student living in Texas, two things are very familiar to me: having uninsured family members and being solicited by said family members for medical advice.

A few weeks ago, a relative approached me at a family BBQ (also familiar to anyone living in Texas) and showed me a superficial skin infection on her inner thigh. It was red, painful, and had gnarly streaks where the infection was spreading. I advised her to head to a real doctor for antibiotic treatment. I even told her about a local doctor who is willing to see uninsured patients for next to nothing. She sighed and explained that even if he did take a look at her, she likely couldn’t afford any expensive antibiotics.

She is not alone. Out-of-pocket medical costs end up putting many . Surprisingly, however, even privately insured patients are facing increasing out-of-pocket costs.

A new report from the Center for Medicare and Medicaid Services (CMS) published in Health Affairs illustrates the distribution of out-of-pocket (OOP) health care expenditures by insurance status.

In 2010, OOP costs for Americans with grew 4.1% to 42.7% of total OOP spending. From 2007 to 2009, that growth averaged 2.4%, illustrating a growing trend of employers passing more of the health care costs to employees by imposing higher cost-sharing requirements or moving employees to high-deductible health plans.

Some Americans are choosing to combat rising costs by seeking dual coverage. Medicare beneficiaries (including dual-eligibles) accounted for 40% of total OOP spending. Those with both Medicare and Medicaid spent more on health care per year compared to Americans with Medicare alone ($28,337 vs. $12,814 in 2010), but spent a similar amount in OOP cost ($2,520 vs. $2,582). This means that while Americans with Medicare alone paid 20% of their healthcare costs out-of-pocket costs, dual eligible beneficiaries paid only 9% of their total healthcare expenditures.

Americans without insurance accounted for only 7.2% of OOP health costs in 2010, down from 9.0 in 2008, as they continue to self-ration care.

The changing landscape of the health insurance market will continue to affect OOP spending, but with more emphasis on cost-sharing among the insured, we all may end up self-rationing care.

Abstract

Out-of-pocket health care spending in the United States totaled $306.2 billion in 2010 and represented 11.8 percent of total national health expenditures, according to the Centers for Medicare and Medicaid Services’ National Health Expenditure Accounts. Spending by people with employer-sponsored health insurance and those covered by Medicare accounted for over 80 percent of total out-of-pocket spending. People without comprehensive medical coverage accounted for less than 8 percent of all out-of-pocket expenditures in 2010. Between 2007 and 2010 per person out-of-pocket spending grew most rapidly for people primarily covered by employer-sponsored insurance and declined for people primarily covered by Medicare and those without coverage. PMID: 25561651

Catlin, Mary K. et al. Health Aff. 2015; 34 (1): 111-116.