Research Letter
Health and the 2024 US Election
May 28, 2024
Financial Burden of Health Care in the Privately Insured US Population
Sukruth A. Shashikumar, ZhaoNian Zheng, Karen E. Joynt Maddox, et al
JAMA Intern Med. Published online May 28, 2024. doi:10.1001/jamainternmed.2024.1464
Improving health care affordability is a national priority, including for the nearly 180 million individuals with private insurance coverage who have experienced increased premiums and decreased benefits (eg, increasing copayments and deductibles). However, little is known about how changes in privately insured families’ contributions to insurance premiums and out-of-pocket spending have affected the financial burden of health care over the past 2 decades.1 This issue is particularly salient for those with low incomes, who are more susceptible to debt, bankruptcy, and worse health outcomes due to poverty.1,2 Understanding changes in the financial burden of health care has important implications for patients and policymakers, who have made addressing care affordability a priority.
Methods
This cross-sectional study used 2007 to 2019 Medicare Expenditure Panel Survey data for respondents and family members younger than 65 years with private insurance. Families’ total health care spending was calculated as contributions to premiums plus out-of-pocket medical and prescription drug spending. We assessed families’ annual financial medical burden by dividing their total health care spending by their postsubsistence income (income less estimated food costs).3,4 We estimated national projections using survey weights, evaluated trends using survey-weighted regression models, and inflation-adjusted dollar values to 2019 US dollars. Full details are in the eAppendix in Supplement 1.
Results
The unweighted sample included 96 075 families and a mean annual weighted population of 83 523 039 families (mean [SD] age in 2007, 36.8 [0.2] years; 7632 female individuals [50.7%]) (Table). From 2007 to 2019, privately insured families’ inflation-adjusted mean total health care spending increased from $3920 to $4907 (Figure, A), largely owing to an increase in contributions to premiums. Financial medical burden was 8.4% (95% CI, 8.0%-8.9%) of postsubsistence income in 2007 and 9.8% (95% CI, 9.3%-10.3%) of postsubsistence income in 2019 (P < .001).
Among low-income families, mean total health care spending was $3163 in 2007 and $3247 in 2019 (Figure, B). Low-income families’ medical burden was 23.5% (95% CI, 21.4%-25.6%) in 2007 and 26.4% (95% CI, 24.0%-28.7%) in 2019 (P < .001). Among higher-income families, mean total health care spending increased from $4071 in 2007 to $5239 in 2019 (Figure, C). Higher-income families’ medical burden was 5.4% (95% CI, 5.2%-5.6%) in 2007 and 6.5% (95% CI, 6.3%-6.8%) in 2019 (P < .001) (Figure, D).
Discussion
In this national cross-sectional study of privately insured US families, inflation-adjusted health care spending increased from 2007 to 2019, largely owing to increasing contributions to premiums. Annual financial medical burden increased significantly, both overall and among low-income and higher-income families. Mean financial medical burden was more than 26% of postsubsistence income for low-income families, compared with approximately 6% for higher-income families.
Although premiums increased across all income groups, out-of-pocket spending remained stable over time. To what extent this represents either payers’ choice to keep out-of-pocket cost-sharing stable, but generate additional revenue through higher premiums, or a demand response by which patients limit health care utilization to control their overall spending, remains an important area for future work. A limitation of this study is the inability to account for increasing costs of other necessities (eg, housing and utilities), such that estimates of the financial burden of health care remain conservative.3
Our findings highlight the need to strengthen financial safeguards for low-income families, including those who do not meet enhanced state definitions of Medicaid eligibility and are considered well-resourced enough to rely on private insurance. Furthermore, these results suggest that, without stronger emphasis on regulating premiums, controlling out-of-pocket costs is necessary but not sufficient to alleviate the burden of health care.5 Factors underlying increasing premiums include aging enrollees with increasing utilization, increasing administrative and specialty drug costs, market consolidation, and insurers’ interests in profitability.6Policymakers might consider strengthening income-based subsidies, improving drug price negotiation, and bolstering antitrust scrutiny to help contain the costs of premiums.
