U.S. Workers Have Increased Out-of-Pocket Health Care Costs, Study Finds
Health care costs are increasing more rapidly than incomes, according to a Center for Studying Health System Change study released Wednesday, CongressDaily reports (Rich, CongressDaily, 12/3). The study, "Patient Cost Sharing: How Much is Too Much?," assessed the potential financial impact of increased patient cost sharing under six health plan models, using data from the 1997 Medical Expenditure Panel Survey and adjusting for 2003 health care cost and utilization increases. The models ranged from a plan with no deductible and fixed $10 copayments for physician visits to a plan with a $2,500 deductible, a 30% coinsurance for in-network care and a 50% coinsurance for out-of-network care. The study found that under the plan with no deductible and a $10 doctor visit copay, 1% of people with incomes between 125% and 200% of the federal poverty level have out-of-pocket costs exceeding 10% of their income, compared with 23% of people in the same income range who have the plan with the $2,500 deductible and coinsurance. The study also found that under a plan with no deductible, a $20 copay for doctor visits, a $150 copay for emergency room visits and a $250 copay for daily inpatient care, people in poor health would pay $862 in out-of-pocket costs annually, compared with $2,942 in annual costs if they had a plan with a $2,500 deductible. Researchers say that the figures reflect that employers are restructuring health benefits to increase patients' out-of-pocket costs by raising deductibles, copays and coinsurance, leaving seriously ill and low-income employees with greater financial burdens.
Paul Ginsburg, the center's president, said, "By giving patients a greater financial stake in their care, employers are trying to encourage workers to economize when using health care services. As out-of-pocket costs increase, however, both the financial and medical consequences for seriously ill and low-income people increase, especially since most cost-sharing requirements don't differentiate between essential care and highly discretionary care." Sally Trude, a senior researcher at HSC and the study's author, said, "If employers want to avoid creating financial hardships for seriously ill and low-income workers, they will need more refined tools that encourage cost-effective care," adding that health providers also need to be involved in such changes (HSC release, 12/3). The group recommends reforms including implementing tests of clinical effectiveness for new techniques and devices before covering them under health plans (CongressDaily, 12/3). The report is available online.
Health care cost increases for HMOs, preferred provider organizations and prescription drugs are expected to slow in 2004, according to a survey by benefits consulting firm Segal, Reuters/Chicago Tribune reports. For HMOs, costs are projected to rise 13.7% in 2004, compared with an estimated 14.4% increase this year, the company says. Further, Segal predicts that PPO costs will rise by 14.4% next year, compared with 14.5% this year. Prescription drug costs are projected to increase by 18.1% in 2004, compared with 19.5% this year, according to Segal (Reuters/Chicago Tribune, 12/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.