Out-of-pocket (OOP) health costs for U.S. consumers decreased between 2000 and 2014 (see Out-Of-Pocket Health Costs Decreased For All Age Groups Between 2000 & 2014). Given the coverage of the topic in the popular press and in our political discourse, these findings did surprise me – Out-Of-Pocket Costs Based On List Prices, The Next Obamacare Battleground: Subsidies For Out-Of-Pocket Costs, and Higher Copayments And Deductibles Delay Medical Care, A Common Problem For Americans.
The real story was hidden in these reported “averages.” The OOP decrease among older adults covered by both Medicare and Medicaid decreased by 69.5%, from $1,253 in 2000 to $427 in 2014. But for consumers under age 65 with any private insurance, average annual OOP payments increase by 10.8%, from $592 in 2000 to $656 in 2014. It is the consumers with private insurance that are seeing the increase in what they spend personally for health care.
But hidden one step below the averages are the implications of OOP costs for individuals. For example, for plans on the health insurance exchanges in 2017, the OOP limit for a marketplace individual plan is $7,150 and $14,300 for a family plan. Compare this to the OOP limit for a 2016 individual marketplace plan at $6,850, and $13,700 for a family plan (see Out-Of-Pocket Maximum/Limit). Depending on the plan, this covers 60% to 90% of charges until that OOP maximum is paid (see The ‘Metal’ Categories: Bronze, Silver, Gold & Platinum).
And for employer-sponsored health insurance, a recent Kaiser study found that average annual employer family health premiums rose to $18,142 in 2016. At the same time, more workers have enrolled in high-deductible plans that have savings options over two years, with the average deductible rising 12% to $1,478 annually – at smaller firms, the average is $2,000 (see Average Annual Workplace Family Health Premiums Rise Modest 3% to $18,142 in 2016; More Workers Enroll in High-Deductible Plans With Savings Option Over Past Two Years).
What does this mean? As commercially-insured consumer (as opposed to those insured by Medicare and Medicaid) pay more out-of-pocket, they will demand more for that money. And this brings with it two implications for health and human service provider organizations – does your organization have a positive “consumer experience” and does your organization understand how to market to consumers developing greater “money savvy” for health care? Answering the question, “what do consumers want?” will matter even more – What Do Your Consumers Want?.
For more on the issue of consumer out-of-pocket spending trends and issues, check out these resources from the OPEN MINDS Industry Library:
- The Challenges Of Rising Consumer Spending On Health Care
- How Should Consumers Pay For Your Services?
- What Can Your Management Team Learn From Black Friday?
- The New Health Care Market: Consumers Spend More & Consumers Want More
- Medicaid Eligibility & Work Requirements – Another Pending Strategy Issue
- Average Overall Fee For Office-Based Physician Visit $228, With Range Across Specialty Types).
- Medicaid Expansion Possibly Reduced Prevalence Of ‘Medical Divorces’ Among Adults Age 50 To 64
- For Families Of Adults With Disabilities, Average Annual Spending On Consumer Care At $6,954
- Estimated Out-Of-Pocket Health Care Costs For Retired Couples Tops $260,000
- Average Out-Of-Pocket Health Care Costs Estimated At $395,000 For A 65-Year-Old Healthy Couple Retiring In 2016
For more about developing the necessary communication to understand what your consumers want, join OPEN MINDS Executive Vice President Timothy Snyder on June 8 for The 2017 OPEN MINDS Online Marketing Summit, in New Orleans.