By Gary Claxton, Larry Levitt, Michelle Long and Erik Blumenkranz
Kaiser Family Foundation, Peterson-Kaiser Health System Tracker, October 4, 2017
Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years. For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,505 between 2006 and 2017.
To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.
We find that, between 2005 and 2015, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell. As can be seen in the chart below, over this time period, patient cost-sharing rose substantially faster than payments for care by health plans as insurance coverage became a little less generous.
From 2005 to 2015, the average payments by enrollees towards deductibles rose 229% from $117 to $386. The average payments towards coinsurance rose 89%, from $134 to $253, while average payments for copays fell by 36%, from $218 to $139. Overall, patient cost-sharing rose by 66%, from an average of $469 in 2005 to $778 in 2015. Wages, meanwhile, rose by 31% from 2005 to 2015.
The relatively high growth in payments toward deductibles is evident in the changes over time in the distribution of cost sharing payments: deductibles accounted for 25% of cost sharing payments in 2005, rising to 50% in 2015.
Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers continue to show concern about their out-of-pocket costs for care. Although health insurance coverage continues to pay a large share of the cost of covered benefits, patients in large employer plans are paying a greater share of their medical expenses out-of-pocket. And, while health care spending has been growing at fairly modest rates in recent years, the growth in out-of-pocket costs comes at a time when wages have been largely stagnant.
By Don McCanne, M.D.
In the past decade, payments for health insurance deductibles increased by 229% – over 7 times the 31% rate of increase in wages during that same period. The authors conclude, “Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers continue to show concern about their out-of-pocket costs for care.”
In yesterday’s Quote of the Day message, David Himmelstein, Carol Paris and Steffie Woolhandler explained why cost sharing, such as deductibles and copayments, are detrimental to health care and should be abandoned. If you do not yet have down pat an “elevator speech” on why cost sharing should be eliminated, perhaps you should read again (or for the first time) their background explanation, available at the following link:
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