Some Americans are paying 10 times more in out-of-pocket healthcare fees simply because of where they live.
Experts say a confluence of factors – fewer doctors to treat people in rural areas, more uninsured people in Southern states, and high reliance on private insurance in the Northeast and Upper Midwest – contributes to major insurance price disparities county-by-county.
A sweeping new analysis found that, while health insurance covers most healthcare costs, Americans spent nearly half a trillion dollars in out-of-pocket costs on healthcare services in 2019 — a new record.
Counties in Alaska, Wyoming, Montana, and the Dakotas, as well as parts of New England, had the highest rates of out-of-pocket spending in 2019, ranging from $720 to $2,335 per person.
The analysis by University of Washington Researchers showed these states and New England rely heavily on private health insurance companies to cover bills. When people seek care their insurance covers, they still face out-of-pocket costs, like deductibles, co-pays, and co-insurance.
Meanwhile, many counties in Southern states, where people are more likely to be underinsured, tended to have lower out-of-pocket spending, suggesting without health coverage, people may avoid medical care altogether.
And in coastal areas, high out-of-pocket spending corresponded with locations of metropolitan areas, including Boston, Washington, DC, Miami, Los Angeles, and Seattle, where healthcare tends to be more expensive.
In 2019, rural states like Alaska, Wyoming, Montana, and the Dakotas had the highest out-of-pocket spending, ranging from $720 to $2,335 per person. In contrast, counties in Southern states with higher underinsurance rates had lower spending, indicating that lack of coverage may lead people to avoid care
Researchers at the University of Washington’s School of Medicine analyzed over 40billion insurance claims, nearly one billion facility records, and survey data to show how healthcare spending on 148 health conditions varies across 3,110 counties.
For people under 65, about 12 percent of healthcare spending was by the patient out of pocket, which amounts to approximately $288 billion.
Over half of healthcare services were paid for by private insurance, about 25 percent by Medicaid, and seven percent by Medicare.
After age 65, when a person is automatically enrolled in Medicare (the federally-funded healthcare program for seniors), 11.5 percent of services were paid for by the patient out of pocket, which amounts to about $276billion
Over 60 percent of services are paid for by Medicare. More than 18 percent of services were paid for by private insurance, and seven percent by Medicaid.
The biggest differences in healthcare spending across counties were seen in the amount people paid out of pocket, adjusted for age.
The out-of-pocket costs that Americans pay have risen over time.
The latest study did not estimate per-person out of pocket spending in 2019, but the Kaiser Family Foundation put the total at $1,375 per person, up from $900 per person 30 years ago.
In addition to patient out-of-pocket spending, researchers looked at how much private insurance companies, Medicare and Medicaid (the healthcare program for low-income Americans) spent on healthcare services from check-ups to hospital stays.
The latest study covered more than 76 percent of all personal healthcare spending from 2010 to 2019.
The main driver of differences in healthcare spending by county was the utilization rate, or how much people use healthcare services. More doctor visits, preventive screenings, and diagnostic tests mean more spending by insurers or patients
The main driver of differences in healthcare spending by county was the utilization rate, or how much people use healthcare services.
More doctor visits, preventive screenings, and diagnostic tests mean more spending by insurers or patients.
Without insurance, the costs of essential services can be prohibitively high. As a result, almost half of uninsured people forgo medical care due to cost.
Dr Joseph Dieleman, the study’s lead author, said: ‘If people had better insurance coverage, they would be more likely to pursue regular health checkups, potentially reducing the need for emergency care.
‘This change would also lead to better health outcomes and allow emergency providers to focus on patients with urgent medical needs.’
The Southeast and Southwest tend to have higher shares of uninsured populations, with people in the Southeast mainly relying on their states’ Medicaid programs.
When the Affordable Care Act known as Obamacare – was signed into law, states were allowed to expand their Medicaid programs to cover more people across a wider income range and receive more money from the federal government to do so.
Ten states — Wyoming, Texas, Kansas, Mississippi, Alabama, Georgia, South Carolina, Tennessee, Florida, and Wisconsin — have yet to expand Medicaid.
Southern states account for about 92 percent of the 2.5million people in the Medicaid coverage gap.
The counties with the highest age-standardized spending per capita in 2019 were Nassau County, New York ($13,332), Suffolk County, New York ($12,689), and the District of Columbia ($12,534). On the other hand, the counties with the lowest age-standardized spending per capita were Clark County, Idaho ($3,410), Loving County, Texas ($3,923), and Kennedy County, Texas ($4,027)
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If their state expanded Medicaid, these people would qualify for it. Still, they earn too little to qualify for subsidies on the health insurance exchange, leaving them financially responsible for medical care.
With lackluster coverage, people are less likely to see doctors, which would explain relatively low out-of-pocket spending per person.
In the upper Midwest and Northeast, meanwhile, most people rely on private health insurance to cover most of their health insurance costs.
According to University of Washington researchers, these areas had some of the highest rates of per capita healthcare spending.
Out-of-pocket spending in those areas was also high, possibly due to high deductibles, copayments, or coinsurance rates.
Access to care is typically better in metropolitan or suburban centers, raising spending in those areas.
Remote Alaska and sparsely populated areas in the Midwest may have fewer healthcare providers and few health insurance options, which can lead to high out-of-pocket spending.
The largest share of healthcare spending by insurers, the government, and individuals was on diabetes, at $143.9 billion.
Medicaid spent the least amount of money on healthcare services in Southeastern states that have not passed laws the expand access to benefits to a wider population of low-income residents
This was followed by musculoskeletal disorders like joint pain and osteoporosis ($108.6 billion), oral disorders ($93 billion), and ischemic heart disease ($80.7 billion).
Of the total spending, 42 percent went to outpatient care, 24 percent to hospital inpatient care, and 14 percent to prescription drugs.
Spending by county varied significantly, ranging from $3,410 per person in Clark County, Idaho, to $13,332 per person in Nassau County, New York.
The study’s findings appeared in the Journal of the American Medical Association.
The most significant differences across counties were in the amount people paid out-of-pocket and in private insurance spending. The main factor in these differences was how often people used health care, though cost and care intensity also played a role, except for those covered by Medicare.