Trends in healthcare spending

Health System Tracker, a collaboration between the Peterson Center on Healthcare and Kaiser Family Foundation, published an interesting piece on longer-term trends of healthcare spending among employees of large employers in the US in August. Unsurprisingly, healthcare spending (through both insurance premiums and out-of-pocket spending) has been increasing year after year. In 2008, the average total healthcare spending for a family of four was close to $15,000, while in 2018, the figure almost reaches $23,000 (representing a 55% increase). During the same time period, workers' wages grew by about 25%. In terms of absolute dollars, employees are not seeing all of the increases since their employers have been paying more and more via premiums, just as the employees have been. Similarly, average annual health spending by individual with larger employer coverage has increased from around $3,700 to over $5,700. Elsewhere, people have argued that the increase in spending is mostly due to rising prices, not more consumption of healthcare services.

Most of the increases in out-of-pocket spending appears to be coming through deductibles, at the expense of copayments. If the absolute dollar figure for copayments remains relatively static (e.g. $35 per visit), it would make sense that the percentage of out-of-pocket spending through deductibles has increased dramatically. However, in other news, Kaiser Health News reports that many employers are planning to scale back their reliance on high-deductible plans -- when the economy does well, employers are more likely to be generous with benefits such as health insurance.