Some Families With Private Health Insurance Still Need Financial Help, Study Says

The financial medical burden for low-income families with private health insurance has continued to increase over the past two decades, suggesting that these families could use more help to pay for their healthcare needs, researchers found.

Among low-income families in the U.S. with private insurance, the financial medical burden grew from 23.5% of their post-subsistence income in 2007 to 26.4% in 2019 (P<0.001), according to Rishi Wadhera, MD, of Beth Israel Deaconess Medical Center and Harvard Medical School in Boston, and colleagues.

While that burden — a measure of income minus food costs — increased for higher-income families with private insurance as well, it represented a much smaller fraction of their resources, 5.4% in 2007 and 6.5% in 2019 (P<0.001), Wadhera and co-authors detailed in a JAMA Internal Medicine research letter.

“Our findings highlight the need to strengthen financial safeguards for low-income families, including those who do not meet enhanced state definitions of Medicaid eligibility and are considered well-resourced enough to rely on private insurance,” they wrote.

Although 180 million people in the U.S. have private health insurance coverage, “little is known about how changes in privately insured families’ contributions to insurance premiums and out-of-pocket spending have affected the financial burden of healthcare over the past two decades,” the authors noted. “This issue is particularly salient for those with low incomes, who are more susceptible to debt, bankruptcy, and worse health outcomes due to poverty.”

In their study, the inflation-adjusted mean total healthcare spending across all privately insured families increased from $3,920 in 2007 to $4,907 in 2019, “largely owing to increasing contributions to premiums.” Mean spending during that time increased from $3,163 to $3,247 among the low-income families and from $4,071 to $5,239 for the high-income families.

While the annual financial medical burden increased significantly, out-of-pocket spending stayed stable over time, but it is unclear whether this was due to actions by payers or to families limiting their healthcare use in order to control spending, the study authors said.

“These results suggest that, without stronger emphasis on regulating premiums, controlling out-of-pocket costs is necessary but not sufficient to alleviate the burden of healthcare,” Wadhera and his fellow researchers concluded. “Factors underlying increasing premiums include aging enrollees with increasing utilization, increasing administrative and specialty drug costs, market consolidation, and insurers’ interests in profitability. Policymakers might consider strengthening income-based subsidies, improving drug price negotiation, and bolstering antitrust scrutiny to help contain the costs of premiums.”

In an accompanying editors’ note, JAMA Internal Medicine Deputy Editor Mitchell Katz, MD, of NYC Health and Hospitals in New York City, and colleagues called the results “particularly striking, as they demonstrate the large proportion of income dedicated to healthcare among families with a low income but private insurance who on paper might appear to have adequate coverage of their healthcare costs.”

“Even among the privately insured, many of whom receive employer-sponsored coverage, families with a low income may face daunting financial challenges in covering the total costs of healthcare,” the editors continued. “Moreover, we do not know how many families with a low income, with theoretical access to coverage, actually forego health insurance and healthcare to pay other expenses.”

“Conversely, we do not know what was sacrificed to pay for healthcare costs among privately insured families with a low income,” they said. “What does seem apparent is that privately insured families with a low income would benefit from greater subsidies for health insurance premiums and lower out-of-pocket costs. Although we usually focus health reform efforts on uninsured families or those relying on publicly subsidized insurance (e.g., Medicaid), privately insured families with a low income also need remedies to ease the financial burden of their healthcare.”

For the study, Wadhera and co-investigators performed a cross-sectional study using Medicare Expenditure Panel Survey data for the years 2007 to 2019 for respondents and family members younger than 65 with private insurance. Families’ total healthcare spending was calculated as contributions to premiums plus out-of-pocket medical and prescription drug spending. The authors inflation-adjusted dollar values to 2019 dollars.

To calculate families’ annual financial medical burden, the researchers divided the families’ total healthcare spending by their post-subsistence income. The unweighted sample included 96,075 families and a mean annual weighted population of 83,523,039 families.

A limitation to the study was “the inability to account for increasing costs of other necessities (e.g., housing and utilities), such that estimates of the financial burden of healthcare remain conservative,” they added.

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