Gary Claxton and colleagues, of the Kaiser Family Foundation, have written a concise analysis of the evolution in health payments from 2004 through 2015:
From 2004 to 2014, the average payments by enrollees towards deductibles rose 256% from $99 to $353, and the average payments towards coinsurance rose 107%, from $117 to $242, while average payments for copays fell by 26%, from $206 to $152. Overall, patient cost-sharing rose by 77%, from an average of $422 in 2004 to $747 in 2014. During that period, average payments by health plans rose 58%, from $2,748 to $4,354. This reflects a modest decline in the average generosity of insurance – large employer plans covered 86.7% of covered medical expenses on average in 2004, decreasing to 85.3% in 2014. Worker’s wages, meanwhile, rose by 32% from 2004 to 2014.
I would quibble with Claxton, et al’s use of the noun “generosity” to describe the share of health costs paid by insurers. Insurers pass costs through: Claims they pay are covered by premiums, which are charged to either beneficiaries or employers. If the latter, beneficiaries pay through lost wages. Plus, because claims processed and paid by insurers add administrative costs (“load”) to the costs of actual medical care, total health costs are higher. Quibbling aside, the analysis gives great insight into how the way we pay for health care has changed.
Read More » »