National Health Costs vs. Your Health Costs

Health Care Cost Institute Out-of-pocket spending from the Health Care Cost Institute. Total health spending from the Centers for Medicare and Medicaid Services.

Health care spending growth has plummeted to the lowest levels ever recorded. But many Americans insist that they are paying more and more.

It is jarring, but both of those things are true, as a report from the Health Care Cost Institute helps to show. Out-of-pocket spending on things like deductibles and co-payments has shot up faster than overall spending of late. That means that even while hospitals and insurers have wrung billions of dollars out of the system, many individuals are feeling a heavier and heavier burden.

In its 2012 Health Care Cost and Utilization Report, the nonprofit research group found that health spending grew slowly last year, at a 4 percent annual rate. (The institute looks at the 156 million Americans under the age of 65 with employer-sponsored insurance.)

“Although average health care expenditures grew at nearly the same rate in 2012 as 2011, the causes of the 4 percent increase in spending each year were quite different,” David Newman, the institute’s executive director, said in a statement. “In prior years, rising health care prices drove up spending. In 2012, we saw utilization start to change health care trends for prescription drugs and professional procedures. Preliminary evidence suggests this may be indicative of a larger shift in care as people search for lower-cost care alternatives.”

The institute found that out-of-pocket spending growth outpaced overall spending growth, jumping about 4.8 percent to $768 a person. Older adults, 55 to 64, spent about $1,265 out of pocket, with those under 18 incurring just $427 in uncovered costs. Women also had greater out-of-pocket expenses than men, by more than $200 a year.

Those rising out-of-pocket costs are a major reason that the slowdown in cost growth feels so alien to so many Americans. Health care providers and insurers may see it in their data and their bottom lines. But millions of working Americans don’t. Moreover, economists believe that rising out-of-pocket spending is a major reason that the health care cost curve seems to be bending, accounting for about 20 percent of the slowdown, according to one study published in the venerable journal Health Affairs.

That is because workers with employer-sponsored insurance tend to think twice about medical care when they need to pay $2,000 out of pocket before their insurance kicks in. And that kind of situation is happening more and more. A Henry J. Kaiser Family Foundation survey released in August found that the proportion of workers enrolled in a plan with a deductible of at least $1,000 has climbed to 28 percent this year from just 6 percent in 2006. The average annual deductible has risen to $1,097 in 2012 from $735 in 2008.

Some more interesting findings from the H.C.C.I. report:

• Spending on inpatient services â€" those expensive hospital visits â€" grew more slowly than any other medical service category at 2.4 percent. Spending on often-cheaper outpatient services grew the fastest, at 6.5 percent.
• The gap between spending for women and men widened last year, with expenditures running about $5,246 per woman and $4,125 per man.
• Brand-name prescriptions got a lot more expensive, driving a big decrease in utilization: prices surged 25.4 percent and use declined 20.7 percent, meaning overall spending on brand-name drugs fell about 0.6 percent.
• Health spending grew fastest for young adults (5.4 percent for those aged 19 to 25) and slowest for older adults (2.5 percent for those aged 55 to 64).