Changes In The Equity Of US Health Care Financing In The Period 2005-16

Household Health Care Payments Under Rate Setting, Spending Growth Target, and Single-Payer Policies

Importance

Households have high burden of health care payments. Alternative financing approaches could reduce this burden for some households.

Objective

To estimate the distribution of household health care payments across income under health care reform policies.

Design, Setting, and Participants

Cross-sectional study with microsimulation used nationally representative data of the US population in 2030. Civilian, noninstitutionalized population from the 2022 Current Population Survey linked to expenditures from the 2018 and 2019 Medical Expenditure Panel Survey and 2022 National Health Expenditure Accounts were included.

Exposure

Rate regulation of hospital, physician, and other health care professional payments equal to the all-payer mean in the status quo, spending growth target at 4% annual per capita growth, and single-payer health care financed through taxes.

Main Outcomes and Measures

Household health care payments (out-of-pocket expenses, premiums, and taxes) as a share of compensation.

Results

The synthetic population contained 154 456 records representing 339.5 million individuals, with 51% female, 7% Asian, 14% Black, 18% Hispanic White, 56% non-Hispanic White, and 5% other races and ethnicities (American Indian or Alaskan Native only; Native Hawaiian or other Pacific Islander only; and 2 or more races). In the status quo, mean household health care payments as a share of compensation was 24% to 27% (standard error [SE], 0.2%-1.2%) across income groups (median [IQR] 22% [4%-52%] below 139% of the federal poverty level [FPL]; 21% [4%-34%] for households above 1000% FPL [11% of the population]). Under rate setting, mean (SE) payments by households above 1000% FPL increased to 29% (0.6%) (median [IQR], 22% [6%-35%]) and decreased to 23% to 25% for other income groups. Under the spending growth target, mean (SE) payments decreased from 23% to 26% (SE, 0.2%-1.2%) across income groups. Under the single-payer system, mean (SE) payments declined to 15% (0.7%) (median [IQR], 4% [0%-30%]) for those below 139% FPL and increased to 31% (0.6%) (median [IQR], 23% [3%-39%]) for those above 1000% FPL. Uninsurance fell from 9% to 6% under rate setting due to improved Medicaid access, and to zero under the single-payer system.

Conclusions and Relevance

Single-payer financing based on the current federal income tax schedule and a payroll tax could substantially increase progressivity of household payments by income. Rate setting led to slight increases in payments by higher-income households, who financed higher payment rates in Medicare and Medicaid. Spending growth targets reduced payments slightly for all households.

Horizontal and vertical equity and public subsidies for private health insurance in the U.S

The United States offers two markedly different subsidy structures for private health insurance. When covered through employer-based plans, employees and their dependents benefit from the exclusion from taxable income of the premiums. Individuals without access to employer coverage may obtain subsidies for Marketplace coverage. This paper seeks to understand how the public subsidies embedded in the privately financed portion of the U.S. healthcare system impact the payments families are required to make under both ESI and Marketplace coverage, and the implications for finance equity. Using the Household Component of the Medical Expenditure Panel Survey (MEPS-HC) and Marketplace premium data, we assess horizontal and vertical equity by calculating public subsidies for and expected family spending under each coverage source and using Lorenz curves and Gini and concentration coefficients. Our study pooled the 2018 and 2019 MEPS-HC to achieve a sample size of 10,593 observations. Our simulations showed a marked horizontal inequity for lower-income families with access to employer coverage who cannot obtain Marketplace subsidies. Relative to both the financing of employer coverage and earlier Marketplace tax credits, the more generous Marketplace premium subsidies, first made available in 2021 under the American Rescue Plan Act, substantially increased the vertical equity of Marketplace financing. While Marketplace subsidies have clearly improved equity within the United States, we conclude with a comparison to other OECD countries highlighting the persistence of inequities in the U.S. stemming from its noteworthy reliance on employer-based private health insurance.

The Joint Distribution Of High Out-Of-Pocket Burdens, Medical Debt, And Financial Barriers To Needed Care

Health care financial pressures in the US can manifest themselves in a variety of ways. Some families face high out-of-pocket spending on insurance premiums and medical care relative to income and assets. Some face medical debt that must be paid off over time. And some face delays or go without needed care for reasons involving cost. Whereas prior research has generally focused on these problems separately, a more complete picture of the challenges facing US families can be obtained by examining the joint distribution of these three financial problems. Applying relatively strict definitions of financial problems to data from the 2018-19 Medical Expenditure Panel Survey, we found that 27.0 percent of nonsenior adults lived in families with at least one of the three financial strains assessed. The share of participants facing more broadly defined financial problems was 45.4 percent. Prevalence varied across sociodemographic characteristics, families' health care needs, insurance coverage, and financial resources. The wide distribution of financial strain provides context for ongoing reforms in billing, coverage, and medical debt, as well as for the urgency felt across the country for health care financing reform.

Associations between Hospital Quality Outcomes and Medicare Spending per Beneficiary in the USA

The cost of healthcare in the United States has increased over time. However, patient health outcomes have not trended with spending. There is a need to better comprehend the association between healthcare costs in the United States and hospital quality outcomes. Medicare spending per beneficiary (MSPB), a homogeneous metric across providers, can be used to evaluate the association between episodic Medicare spending and quality of care. Fifteen inpatient outcome measures were selected from Hospital Compare data among all (n = 4758) facilities and transformed to quintiles to ensure comparability across measures and to reduce the influence of outliers on the analysis. Both univariate and multiresponse multinomial ordered probit regression models were utilized across outcome domains to quantify associations between outcomes and spending. We found that MSPB was not associated with quality of care in most cases, adding evidence of a lack of outcome accountability among Medicare-funded facilities. Furthermore, worse outcomes were found to be associated with increased spending for some metrics. Policies are needed to align quality of care outcomes with the increasing costs of U.S. healthcare.

The Affordable Care Act Reduced Income Inequality In The US

Income inequality estimates based on traditional poverty measures do not capture the effects of health care spending and health insurance. To explore the distributional effects of the Affordable Care Act's (ACA's) expansion of health benefits and the resulting income inequality, this study used alternative income measures that incorporate the value of the ACA's health insurance changes under the law. The study simulated the impact of the ACA on income inequality in 2019 compared with a scenario without the ACA. We found that the ACA reduced income inequality and that the decrease was much larger in states that expanded Medicaid than in states that did not. We also decomposed the effect of the ACA on inequality by race/ethnicity, age, and family educational attainment. The ACA reduced inequality both across groups and within these groups. With efforts to repeal the ACA-specifically, California v. Texas-having shifted from Congress to the courts, it remains important to consider the consequences of fully repealing the ACA, which would likely reverse reduced inequality observed under the law.

The ACA a Decade In: Resilience, Impact, and Vulnerabilities

A decade after its enactment, the Affordable Care Act remains both politically viable and consequential, despite Republican efforts to end it. The law's impact on insurance coverage is substantial but remains distant from universal coverage, while its contributions to cost control are at best limited. National public opinion data collected by the author in 2018 reveal both strengths and vulnerabilities in the act.

Accounting for the burden and redistribution of health care costs: Who uses care and who pays for it

Objective

To measure the burden of financing health care costs and quantify redistribution among population groups.

Data Sources

A synthetic population using data combined from multiple sources, including the Survey of Income and Program Participation (SIPP), Medical Expenditure Panel Survey (MEPS), Kaiser Family Foundation (KFF)/Health Research Educational Trust (HRET) Employer Health Benefits Survey, American Community Survey (ACS), and National Health Expenditure Accounts (NHEA).

Study Design

We estimate two dollar amounts for each individual in the synthetic population: (a) payments to finance health care services, which includes all payments by a household and their employers to finance health care, including premiums, out‐of‐pocket payments, federal and state taxes, and other payments; and (b) the dollar value of health care services received, which equals the amount paid to providers for those services.

Data Extraction Methods

We linked the nationally representative survey data using statistical matching. We allocated health care expenditures from the NHEA to individuals and households based on expenditures reported in the MEPS.

Principal Findings

We show that higher‐income households pay the most to finance health care in dollar amounts, but the burden of payments as a share of income is greater among lower‐income households.

Conclusions

Accounting for all sources of payments provides a clear picture of the burden of financing health care costs, and how that burden is spread under our current financing system.