Healthcare costs exceeded $400 during at least one month for more than a quarter of Americans in 2017, ballooning far above the amount Federal Reserve estimates that most U.S. consumers have saved for surprise expenses, according to a new study in Health Affairs.
By analyzing office, inpatient and pharmacist reports , study authors found that most consumers incurred the majority of their care costs in just two months of the year. Of the 18 million people studied using the 2017 IBM MarketScan Commercial Claims and Encounters database, researchers found that 83% of enrollees paid an average of $954 in out-of-pocket healthcare costs, while 17% reported no out-of-pocket healthcare costs.
Michal Horny, an assistant professor at Emory University and co-author of the study, said that most discussion around healthcare affordability in the U.S. centers on what patients spend per year, rather than the frequency with which they are billed. While patients averaged about 12 healthcare encounters per year, Horny said most bills for out-of-pocket costs were incurred within just one week.
"Coming up with several thousands of dollars by tomorrow is a much bigger problem than coming up with that much money over the year," Horny said.
The study found that nearly 40% of Americans incurred half their annual out-of-pocket spending after just one trip to the doctor's office, hospital or pharmacist in 2017. More than a quarter of Americans, or 26%, incurred 90% of their annual out-of-pocket expenses after just two healthcare encounters.
Among the 42% of people who spent at least $400 in out-of-pocket costs in 2017, nearly half reached that amount in just a day. Two-thirds reached that amount within a month. This was particularly common for individuals admitted for in-patient stays at hospitals.
Individuals admitted to the hospital at least once in 2017 spent an average of $3,347 in out-of-pocket costs, more than four times as much as those who did not need hospitalization. Hospitalized patients also reached at least 50% of their out-of-pocket spending in 23 days.
Horny said this problem is particularly acute for those enrolled in high-deductible health insurance plans, which have risen in popularity in recent years.
In 2019, the Kaiser Family Foundation found that 30% of Americans were enrolled in a high-deductible plan.
As a way to make being hit with a high-cost bill more manageable for families over time, employers and health plans could limit annual deductibles to more affordable levels, Horny said, although he noted that this could lead to increased premiums and shifted costs for healthier enrollees. He added that insurers could easily structure consumers' out-of-pocket spending limits by month rather than year, which would make it easier for consumers to understand their health benefits.
The study also noted that insurers also consider exempting certain types of necessary care from individuals' deductibles. He said employers and insurers could increase the use of value-based insurance design and exempt high-value care from deductibles.