Out-of-pocket health expenditures have declined during the pandemic: EBRI

It may seem logical to assume that employee health care costs and out-of-pocket spending has been on the rise for some time. And that was the case according to an Employee Benefit Research Institute analysis entitled Recent Trends in Patient out-of-Pocket Cost Sharing, which showed out-of-pocket costs by patients with employer-sponsored health plans increased 10% from 2013 before the pandemic.

Out-of-pocket expenditures for outpatient services also grew faster between 2013 to 2019 ($470 to $631) than expenditures for inpatient services ($109 to $127). After the pandemic hit, something interesting started to occur. According to estimates produced by the Centers for Medicare and Medicaid Services (CMS), out-of-pocket spending on health care comprises 9.9% of total national health expenditures, decreasing from 11.3% in 2019. The report says that this continues a decades-long steady decline in the share of total health care spending paid out of pocket and represents an all-time low since CMS started tracking this data.

Why?

The report continues that: “There was a widely documented sharp decrease in services sought at the onset of the pandemic when stay-at-home orders were issued by cities and states. These orders also closed many doctors’ offices and caused hospitals to postpone all but the most essential care. One cross-sectional analysis of five states found, for instance, that visits to emergency departments plummeted between 42% and 64% when states issued stay-at-home orders.”

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Also telemedicine increased, while in-person visits decreased, and insurers changed dome pricing and some barriers to accessing health care via telemedicine were lowered specifically because of the pandemic. Overall, notes the report, the share of outpatient spending paid out-of-pocket fell the most, decreasing by 2.9% between 2019 and 2020.

The report’s authors explain that when disaggregating by plan type, “we find that the median share of spending paid out of pocket has either remained stable or decreased for all health plan types…and in general, most people covered by a workplace-sponsored health plan have not seen their out-of-pocket expenditures increase significantly.”