Out-Of-Pocket Healthcare Spending on the Decline Since 2000

March 22, 2017 - The Agency for Healthcare Research and Quality (AHRQ) reported that out-of-pocket healthcare spending decreased for all age groups between 2000 and 2014.

A statistical brief of the report presents data from the Household Component of the Medical Expenditure Panel Survey (MEPS-HC) to examine out-of-pocket spending. These excluded payments on premiums, and only focused on care expenses not insured through premiums.

From 2000 to 2014, the percentage of non-elderly individuals, privately insured and uninsured, who had at least one healthcare expense and paid out-of-pocket costs dropped from 96.5 percent, in both categories, to 91.5 and 90.9 percent respectively.

Non-elderly patients with public health insurance who paid out-of-pockets costs were significantly lower to begin with, but also saw decreasing rates throughout the reporting period. The percentage of these people with an out-of-pocket payment dipped from 67.9 percent to 52.2 percent by 2014.

However, the percentage of elderly patients (age 65 and older) on Medicare and private health insurance who faced out-of-pocket spending was relatively stable during the period. The percentage of these patients that paid out-of-pocket for healthcare remained between 97 and 99 percent.

Although, elderly patients on Medicare assistance and public health insurance saw marginally lower rates, between 94 and 98 percent respectively.

Additionally, the report explored the actual dollar amounts consumers paid for out-of-pocket spending from 2000 to 2014.

Researchers found that the actual dollar amounts for out-of-pocket costs significantly decreased for all populations studied. Non-elderly patients paid an average of $1,106 in 2005 for out-of-pocket costs, which dropped to $752 by 2014.

But the 2014 average was not a significant decrease from the $832 average in 2000.

Average out-of-pocket costs decreased for privately insured, non-elderly patients from $834 to $656 from 2005 to 2014, but remained about the average in 2000 ($592).

For non-elderly patients with only public insurance, average out-of-pocket costs decreased from $525 in 2005 to $236 dollars in 2014.

Elderly patients paid higher dollar amounts on average than non-elderly patients, even though the dollar averages also dropped during the reporting time period.

Elderly patients who were only covered by Medicare paid $2,438 on average in 2005. The value decreased to $1,231 in 2014.

For the elderly covered by private insurance and Medicare, average out-of-pocket expenses dropped from $2,005 in 2003 to $1,438 in 2014. The elderly patients covered by both public health insurance and Medicare experienced significantly lower average payments, as the dollar amounts decreased from $1,318 in 2003 to $427 in 2014.

Estimates from the MEPS also showed that out-of-pocket costs made up a majority of healthcare spending for non-elderly patients without insurance, but still decreased over time. Uninsured non-elderly patients spent 75.2 percent of all healthcare spending on out-of-pocket costs in 2000. This percentage dropped to 61 percent by 2014.

In contrast, out-of-pocket costs accounted for just 34.8 to 27.7 percent of total healthcare spending for non-elderly patients with private health insurance.

For non-elderly patients with public health insurance, out-of-pocket costs for non-elderly patients on public health insurance were 17.1 to 8.5 percent of a patient’s total healthcare spending.

Elderly patients also spent less on out-of-pocket costs as part of their total healthcare spending because of Medicare Part D legislation during the timeframe, which made prescription drug coverage available to all Medicare beneficiaries. Patients 65 years or older who had Medicare-only coverage saw their out-of-pocket costs, as a percentage of total healthcare spending, drop from 44.1 percent to 22.9 percent.

Elderly populations who had Medicare and private insurance also saw lower numbers for out-of-pocket costs as part of their total healthcare spending. The value decreased from 30.9 percent in 2005 to 22.3 percent in 2014.

The population who saw the lowest proportion of out-of-pocket spending was elderly patients who had Medicare and public insurance coverage. Out-of-pocket spending only consisted of 8.3 percent of their total healthcare expenditures.

Researchers concluded that out-of-pocket spending depended on whether a person is insured, what type of insurance they have, health status, healthcare utilization frequency, and types of healthcare services accessed.

Medicare Part D legislation and the Affordable Care Act also played major roles in decreasing out-of-pocket expenses for beneficiaries.

“In addition, changes in the health insurance market and in public programs affect trends in out-of-pocket payments,” the reports stated. “Since the early 2000s, deductibles and copayments have increased, high-deductible plans have become more frequent, use of generic drugs has increased, and Medicare Part D legislation and the Affordable Care Act have taken effect.”