A Massachusetts health policy agency says state residents are burdened with persistently high out-of-pocket expenses for health care.
In a new report, the Massachusetts Health Policy Commission says almost half of every additional dollar earned by commonwealth families between 2016 and 2018 was spent on health care – and that nearly a quarter of middle class families with employer coverage spent more than 25% of their earnings on health care.
“We wanted to look at not how much residents are paying for in their premiums — which are partially paid by employers, but all those costs come down to the employee — but how much they're paying in out-of-pocket spending, which is deductibles, co-pays, coinsurance, everything that's not covered by your insurance premium," said MHPC Director of Research and Cost Trends Dr. David Auerbach. “The main finding was that quite a lot of people end up paying pretty high amounts in this, what we’re calling out-of-pocket spending, year after year after year. And this is really a novel study. People haven't been able to look at this before, because we took advantage of the fact that we can follow you across years and the state’s All Payer Claims Database, which is really fantastic. And the amounts we found were quite high.”
“We only included members with 36 months of continuous coverage, and when we study those people across the three years, we found that 3% of them had this persistently high out-of-pocket, always at the extremes of out-of-pocket spending in those years," said MHPC senior researcher Lyden Marcellot. “On average, we found that those with three years of this high out-of-pocket had $3,247 in average annual out of pocket spending during that time.”
Auerbach says that while 3% might not sound like a lot, it represents a significant threat to more than 100,000 state residents.
“For a lot of people, if my income is around $30,000, that's more than 10% of my income just for these out-of-pocket costs," he said. "That's, again, that's aside from the premiums, which are even much more than this. And other literature has found that when people are facing that kind of expense just from seeking care, a lot of them will avoid care. And that's dangerous, especially when it's, you know, taking your chronic medications, when it's going in for appointments when something is wrong and often that care avoidance, especially during a pandemic, can lead people’s conditions to be, to get worse, to be exacerbated. It might result in an ED visit. And even if they don't avoid that care and just continue to pay those deductibles, you have a lot of people that end up with medical debt and financial bankruptcy and even having to trade off, you know, other basic needs, food and housing, just to pay their medical costs.”
Unsurprisingly, high out-of-pocket health care spending disproportionately impacts lower income communities.
“The lowest income areas in Massachusetts, folks could be spending about 8% of their median annual income in out-of-pocket spending," said Marcellot. "And we contrast that with the highest income areas in the state, which were only spending 2.2% in these kinds of spending categories.”
Some Western Massachusetts politicians say health care costs are on their radar.
“I was appalled in September when, basically, the Division of Insurance has to review what insurance companies put forward on a quarterly basis and they assess their costs," said Democratic State Senator Adam Hinds of the Berkshire, Hampshire, Franklin and Hampden district. “At that time, they said that we would see an average rise of 7.9% beginning in 2021, and this was after a year of insurance companies making a profit during a global pandemic. And so it struck us as odd that we can now essentially then turn around and say we’re going to pocket those profits and charge more for insurance for folks during a global pandemic.”
Hinds says the legislature has worked to expand access to health care.
“Right at the end of our session we expanded telemedicine and took some steps related to surprise, out of network billing and the like," he said. "But this is deeply concerning that not only the costs continue to go up, access continues to be a problem, and it disproportionately impacts lower income residents.”
“Everybody I think realizes that the health care system in this country – if we can even call it a system – is on an unsustainable path," said 2nd Berkshire District State Representative Paul Mark. Also a Democrat, Mark is a proponent of Medicare For All. He says countries with nationalized health care are models for a better system.
“The taxes we pay are more than in countries where you’re guaranteed affordable access to health care," he told WAMC. "So to me, it makes perfect sense to join all of these other industrial counties around the world, get into some kind of a single-payer system, and actually save the people of our country money that could be then used for other economic purposes – which would be so much more beneficial to our economy and to our country.”
Mark has co-sponsored a state Medicare For All bill each legislative session for a decade.
