Sickest 10% drive employer plan spending increases, researchers find
Per-employee spending for the other 90% has been flat since 2012.
U.S. employer health plan medical spending has been rising more quickly for the plan enrollees who rank in the top 10% in terms of claims than for other enrollees, researchers report in a new paper published by the American Journal of Managed Care.
Overall medical spending increased 16% between 2012 and 2019 for the enrollees in the top decile, to $32,732.
For the other enrollees, average spending increased just 4.7%, to about $1,400, according to the data in the paper appendix.
The patients’ own out-of-pocket spending followed different paths. For the enrollees in the top 10% in terms of claims, out-of-pocket spending increased just 12%, to $2,879.
For the other enrollees, out-of-pocket spending increased 22%, to $421.
Erin Duffy, a health economics researcher at the University of Southern California, led the four-person team that conducted the research.
What it means
Duffy and her colleagues wonder whether commercial health plans may be doing too little to protect enrollees below the highest spending category and whether that might be affect those enrollees’ ability to pay their medical bills.
The methods
The researchers based their analysis on commercial insurance claims data for the period from 2012 through 2021 from the Health Care Cost Institute.
They included only data for enrollees under 65 in employer-sponsored preferred provider organization plans, point-of-service plans, health maintenance organization plans and exclusive provider organization plans.
The researchers had prescription claim data for half of the enrollees. They performed a separate analysis of the data for enrollees who had both medical and prescription data, and that analysis produced similar results.
The final analysis included data for 329 million “patient years,” or an average of 33 million patients per year.
COVID-19 skewed the results for 2019 and 2020, causing a sharp drop in claims in 2019 and a big increase in 2021.
Out-of-pocket spending details
The Duffy team found that enrollee spending on coinsurance and co-payments held steady throughout the study period.
That shows the increase in out-of-pocket costs was largely due to increases in spending on deductibles, the researchers write.
For enrollees who ranked between 70% and 90% in terms of claims, deductible spending increased 23%, or about $191.