Out-of-pocket healthcare costs straining Americans' finances
A new JPMorgan Chase Institute report, Paying Out-of-Pocket: The Healthcare Spending of 2 Million U.S. Families, found Americans are struggling with out-of-pocket healthcare costs.
Families are delaying healthcare payments until they get more “liquid assets.” For instance, healthcare payments spike in March and April, which is when Americans get their tax refunds.
The report used financial transactions of 2.3 million Americans to see how healthcare spending habits changed between 2013 and 2016.
Out-of-pocket payments increased each year of the study. Families in the top 10% of healthcare spending remain the highest spenders each year, which study authors said showed the costs of chronic conditions and long-term healthcare needs.
The report also found there is a wide difference between out-of-pocket expenses depending on states. Colorado spent the most out of pocket, while Louisiana and Oklahoma saw the largest percentage of income on healthcare. On the other end of costs, California was one of the lowest for both dollar amounts and share of income.
Diana Farrell, president and CEO of JPMorgan Chase Institute, said many Americans don’t have enough money set aside to “withstand the volatility created by out-of-pocket healthcare payments.”
Physician practices and hospitals should find the study results interesting and might even confirm their suspicions — namely that Americans don’t have enough of a financial buffer to pay out-of-pocket costs. So, they often have to wait until they get money to pay medical bills.
Employers and payers have increasingly moved more costs to individuals through out-of-pocket costs and high-deductible health plans, which now make up about one-third of employer-based health plans. Members have seen modest premium increases for employer-sponsored health insurance plans over the past five years; instead, out-of-pocket costs have skyrocketed.
The study feeds into other recent findings from this over healthcare costs and spending patterns.
The Kaiser Family Foundation/Health Research & Educational Trust 2017 Employer Health Benefits Survey recently found that employees are shouldering more of the healthcare costs through out-of-pocket costs and higher deductibles. Out-of-pocket limits are $7,150 for an individual plan and $14,300 for a family plan and plan deductibles often exceed $3,000. Many Americans are worried that they can't afford healthcare.
A recent HealthFirst Financial Patient Survey said more than 40% of respondents are “very concerned” or “concerned" about whether they could pay out-of-medical bills over the next two years. More than half said they are worried that they might not be able to afford a $1,000 bill, 35% were concerned about a $500 bill and 16% said they’re worried about paying a bill less than $250.
- JPMorgan Chase Paying Out-of-Pocket: The Healthcare Spending of 2 Million US Families
- BusinessWire JPMorgan Chase Institute Releases First Report On Out-Of-Pocket Healthcare Spending For 2.3 Million American Families Based on New Data Source
- Business Insider Here's how much people spend on healthcare by state