• Bonus chart of the day: How much longer will Americans put up with this?

    From Annie Lowrey:

    What’s the over-under for how long American’s will stand for this trend?


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    • This is a change how money is spent, not the amount of spending, if I’m reading correctly.

      It could be a change from how much employer’s pay on my behalf to how much I pay directly (which is a change in what’s visible, not total compensation). It could be a change in distribution (total compensation decreasing, part of the trend of capital getting larger part of national income at the expense of labor).

      The former would seem less of a problem than the latter.

    • Of course, there are those who insist that patients must have “skin in the game”, so the growth in OOPEs is considered a good thing. I’ve commented many times that the crisis in health care is largely attributable to the growth in the number of patients with chronic illnesses. For them, OOPEs isn’t a one-time financial setback on the road to recovery: it’s permanent and means financial ruin and dependency. ACA’s caps help, but for working Americans the caps are too high and the exclusions, in particular the exclusion for non-covered services, too large a hole. I’ve also commented many times that the leveling off of health care expenses is largely attributable to the economy and growth in OOPEs. The physicians I work with uniformly say that their patients are foregoing treatment to avoid deductibles and co-pays, a particular concern among the cardiologists and other physicans who treat patients with chronic illnesses whose conditions that will only get worse without regular checkups and treatments. We may be winning the war against escalating health care costs, but at what price?

      • Winning the war against escalating costs? It seems that most analysis demonstrates that the slowing of health care costs is related to the slowing of the economy. Look at the recent CMS analysis in terms of health care cost growth between 2015 and 2022.

        The ACA was supposed to bring costs down for “EVERYONE.” This does not appear to be the case.

        The President said that the status quo of rising health care costs was creating a crisis for our country. It appears that his signature legislation will make the problem worse.

        • First, the proportion of out of pocket costs had been gradually rising well before the ACA was implemented.

          Second, the ACA hopes to bring everyone’s average costs down over the long term, and to cap expenses before they get catastrophic. It’s true that people on the exchanges will get plans that have quite a bit more cost sharing than many large group health insurance plans. And it’s true that the Democrats have often oversold the ACA’s benefits. But the ACA never promised to bring your out of pocket costs down. Unfortunately, it probably won’t, but that would have happened everyway.

          To answer Austin’s question: For better or worse, I think Americans will stand for this longer than they did for HMOs in the 90s.

      • People will have to learn. If you assume that they cannot then everything falls apart no matter what you do. I think more OOPE is a good thing.

    • Remember that “what physicians say” can be pretty biased. It is not good evidence based argument to run with that very far. You have to tease apart this information (as Chandra/Skinner/et al. have done so well), but what this really says is that patients are being somewhat (the key question being HOW much and WHERE) resistant to stopping care when these costs are shifted to their direct shoulders.


    • Just a thought: if we assume a reasonably high growthrate for people’s incomes, this trend needn’t stop. It is well established that insurers charge heafty “loading costs” above the enrollee’s expected costs. The extent to which people are willing to pay the additional loading cost, in turn, depends their risk aversion, which is a local property of the utility function–as incomes rise, it is reasonable to suppose that their risk aversion falls. Hence, they might buy less health insurance.

      Relatedly, it seems to me that an individual’s capacity to self-insure rises as income rises, so again, we might expect them to substitute away from market insurance as incomes rise, relying more on savings instead (though, higher income also means they can afford more total insurance, so the total effect is quite ambiguous).