By Emma Walsh-Alker

Welcome to another year of health policy research. In the first month of 2023, we reviewed studies on how policies expanding health coverage would impact household spending, surprise medical bills generated by ground ambulance rides, and health care costs associated with substance use disorders.

Michael Simpson, Andrew Green, Jessica S. Banthin, How Policies to Expand Insurance Coverage Affect Household Health Care Spending, Commonwealth Fund, January 19, 2023. Researchers identified five potential policy reforms that could build upon the Inflation Reduction Act to further expand access to affordable health insurance coverage: filling the Medicaid “coverage gap;” lowering the employer affordability threshold established by the Affordable Care Act; investing $10 billion in a reinsurance fund; increasing the federal Medicaid match rate; and reducing cost-sharing in the marketplace. Using the Urban Institute’s Health Insurance Policy Simulation Model, researchers analyzed the impact of this proposed reform package on household health care spending (average spending per family member on premium contributions and out-of-pocket costs) among nongroup coverage enrollees under age 65. Households were divided into quintiles, with those in the lowest quintile spending the least on health care and those in the top quintile spending the most.

What it Finds

• If implemented for 2023, the proposed reforms would lead to an additional 3.7 million people gaining health coverage, primarily resulting from filling the Medicaid coverage gap and reducing cost sharing in the marketplace.
• All but the lowest spending quintile of households would see reductions in their health care spending.
  • The top quintile of households would save an average of $872 annually. Those in the second-highest spending group would save an average of $583, and the middle group of spending would see annual savings of $256.
  • The share of income spent on health care costs in households that spend the highest percentages of their total income on health care would decrease significantly, from 45 percent to 25 percent.
  • The lowest quintile of spenders would see small increases in spending as they gain access to coverage and subsequently health care services through the reforms, resulting in an associated increase in utilization.
• In general, households with lower incomes would see larger savings than higher income households.
  • Households with incomes below 138 percent of the federal poverty level in the 12 states that have not expanded Medicaid would particularly benefit from reforms that fill the Medicaid coverage gap. Average spending in the highest quintile would decline by $3,736 among this group.
  • Households with incomes between 138–400 percent of poverty would receive enhanced marketplace subsidies, and spending in the highest quintile would drop from $7,262 per person to $6,251 per person.
  • Savings for households with incomes above 400 percent of poverty—ranging from $141 in lowest quintile and $516 in the highest quintile—would be generated by lower premiums, stemming from reforms including reinsurance and enhanced cost-sharing subsidies. However, the average share of household spending on health care for this income group would see much smaller declines compared to other income groups.

Why it Matters
While the Inflation Reduction Act is a critical investment in the health insurance safety net, this analysis shows that additional policy changes impacting Medicaid and the nongroup market would significantly expand coverage and improve affordability, particularly for low-income populations. Additionally, this study demonstrates the importance of household health care spending as a metric for assessing insurance reforms. By accounting for both premium contributions and out-of-pocket costs, household spending provides a more comprehensive illustration of the financial burdens associated with coverage and care, as well as a clearer picture of a policy’s distinct impacts on different subpopulations.

Loren Adler, Bich Ly, Erin Kuffy, Kathleen Hannick, Mark Hall, Erin Trish, Ground Ambulance Billing and Prices Differ by Ownership Structure, Health Affairs, January 18, 2023. The No Surprises Act (NSA) protects privately insured patients from “surprise bills” in common situations where the patient is unable to choose their health care provider, such as an emergency. However, while air ambulance transports are covered by the NSA, ground ambulance transport is not, leaving consumers vulnerable to continued surprise medical bills from out-of-network ground ambulance rides. Regulation of ground ambulance pricing and billing often occurs at state and local levels, and some local governments staff and operate emergency ground ambulance services, resulting in a variety of billing practices. To gain a better understanding of the ground ambulance landscape, researchers compared prices, patient cost-sharing amounts, and the incidence of surprise bills in public- versus private-sector ground ambulance organizations. The study sample included 3.72 million ground ambulance transport claims submitted to commercial insurers between 2014 and 2017.

What it Finds

• Regardless of whether a ground ambulance was publicly or privately operated, a sizeable percentage of ground ambulance transports in the study sample likely generated surprise bills in both emergency and nonemergency situations.
  • 85 percent of emergency ground transports were delivered out-of-network. Insurance covered the full cost of approximately two-thirds of out-of-network transports, leaving 28 percent of the transports at risk for a surprise bill.
  • Among nonemergency ground ambulance transports, 57 percent were delivered out-of-network, and 26 percent of these transports potentially generated a surprise bill.
• Although public-sector ground ambulance transports were more likely to be delivered out-of-network, the charges were more likely to be “allowed in full” (thereby eliminating the risk of a surprise bill).
• Surprise bills from privately owned ambulances were likely much higher than those incurred from publicly owned ambulance operations.
  • For the most common type of emergency transport in 2017 (emergency advanced life support), the average magnitude of a potential surprise bill was 52 percent higher in privately owned ambulance organizations compared to publicly owned organizations.
  • Patients transported by a private-sector ambulance in 2017 also faced 25 percent higher average cost-sharing amounts than patients served by public-sector ambulances.
• Allowed amounts for emergency transport varied significantly across states and ownership types.
  • Allowed amounts for about 40 percent of emergency advanced life support transports in the study sample were roughly equal to Medicare rates. However, the top 30 percent of allowed amounts were over double the Medicare rate.
  • Researchers suggested that geographic variation in allowed amounts may be influenced by wealth, as wealthier areas may have more resources to subsidize ambulance services with taxpayer dollars (limiting patient costs), as well as the patchwork system of state and local regulations.

Why it Matters
These findings demonstrate that despite landmark protections under the NSA, consumers are likely still at risk for surprise bills when they need ground ambulance transport. Recognizing this gap in the new federal protections, the NSA established an Advisory Committee on Ground Ambulance and Patient Billing. The Advisory Committee must provide recommendations on ways to prevent surprise bills and improve the transparency of ground ambulance costs. As stakeholders at the federal and state level consider how to protect patients from the financial risk of ambulance services, they should take note of the high prevalence of out-of-network ground ambulance transports, price variation across markets, and differences in consumer costs associated with publicly and privately owned ambulance operations.

Mengyao Li, Cora Peterson, Likang Xu, Christina A. Mikosz, Feijun Luo, Medical Costs of Substance Use Disorders in the US Employer-Sponsored Insurance Population, JAMA, January 24, 2023. Researchers estimated the annual health care costs associated with substance use disorders (SUDs) among employer-sponsored insurance (ESI) enrollees. Using the MarketScan claims database, which includes expenditures on inpatient and outpatient services as well as outpatient drugs for roughly 350 payers, researchers compared total medical expenditures in 2018 among ESI beneficiaries with and without an SUD diagnosis to estimate potential savings generated by successful prevention and treatment of SUD (referred to as the “attributable cost”).

What it Finds

• In the study sample of 162 million workers with ESI in 2018, 2.3 million had an SUD diagnosis.
• The mean annual payer expenditure for ESI enrollees diagnosed with an SUD was $26,051 in 2018, while the corresponding average expenditure for enrollees without an SUD diagnosis was $10,405.
  • The mean attributable cost of a SUD diagnosis per impacted enrollee was $15,640 annually.
• In 2018, estimated medical cost associated with SUD in the ESI population was $35.3 billion.
  • Alcohol- and opioid-related disorders were the most expensive, comprising $10.2 billion and $7.3 billion of the total medical cost, respectively. These diagnoses were also common among the ESI population: over half of enrollees with an SUD had an alcohol-related disorder, and approximately 30 percent had an opioid-related disorder.
• Although the claims data evaluated show that only 1.4 percent of the ESI population had an SUD diagnosis in 2018, 11 percent of workers self-reported having a SUD. Thus, the total medical costs incurred by employers and payers are likely higher than captured in the study.

Why it Matters
Although authors examined 2018 data, substance use disorders only increased during the COVID-19 pandemic. According to the National Survey on Drug Use and Health, over 46 million people aged 12 and over in the United States had an SUD in 2021. Employers can help respond to this public health crisis by ensuring their employees have access to addiction prevention and treatment services through their ESI coverage. Employer investment in these interventions could generate long-term savings by heading off high health care costs associated with SUDs.