Trends in out-of-pocket spending by insured American workers, 1990-1997

Area of Science:

• Health Economics
• Healthcare Policy
• Consumer Spending Analysis

Background:

• Assessing healthcare cost trends is crucial for understanding economic burdens on insured workers.
• Previous research indicates shifts in healthcare spending patterns over time.
• Understanding out-of-pocket expenses is vital for evaluating the impact of insurance policies.

Purpose of the Study:

• To analyze trends in out-of-pocket spending for individuals with job-based health insurance.
• To identify changes in specific categories of healthcare expenditure between 1990 and 1997.
• To explore the potential influence of managed care on cost-sharing.

Main Methods:

• Utilized data from the Consumer Expenditure Survey (CES) spanning 1990-1997.
• Analyzed detailed quarterly spending data from over 10,000 households with employer-sponsored health insurance.
• Calculated changes in out-of-pocket spending in constant dollars.

Main Results:

• Overall out-of-pocket spending remained constant in real terms during the study period.
• Spending on medical services, drugs, and supplies decreased by 23 percent.
• Employee contributions to health insurance premiums increased, offsetting the decline in direct medical costs.

Conclusions:

• Despite reduced cost-sharing for medical services, total out-of-pocket costs for insured workers did not decrease.
• Rising health insurance premiums significantly impacted the overall financial burden.
• The adoption of managed care may have contributed to lower direct medical spending but was counteracted by premium increases.