Annual Out-Of-Pocket Spending Clusters Within Short Time Intervals: Implications For Health Care Affordability

The distribution of out-of-pocket spending throughout the year is an important determinant of health care affordability that has received little attention. We used 2017 data from a large database of US commercial insurance claims to study the distribution of patient-level out-of-pocket spending throughout the year, highlighting potential hardship due to temporal clustering of spending. We found that although most commercially insured people had several health care encounters throughout the year, their out-of-pocket spending was mostly concentrated within short time intervals. Nearly one-third of people with above-the-median total annual health care spending (plan plus out-of-pocket spending) incurred half of their annual out-of-pocket spending in just one day. Policy makers working to improve the affordability of care should focus on innovative approaches to cost sharing that prevent dramatic financial shocks to household budgets due to medical bills.