By Leila Sullivan and Samantha Hagberg

The leaves are falling but the latest health policy research is evergreen! Last month we read about health system competition in metropolitan areas, health care affordability prior to the American Rescue Plan (ARPA,) how high deductible health insurance can exacerbate racial and ethnic wealth disparities, and about unmet dental, vision and hearing needs among low-income Medicare Advantage beneficiaries.

One or Two Health Systems Controlled the Entire Market for Inpatient Hospital Care in Nearly Half of Metropolitan Areas in 2022

Jamie Godwin, Zachary Levinson, and Tricia Neuman. KFF. October 1, 2024. Available here.

This KFF article analyzed health system market competitiveness using RAND hospital data from 2022 and the American Hospital Association’s (AHA) Annual Survey Database. Researchers measured competition in three ways: The share of metropolitan statistical area (MSAs) controlled by a small number off health systems, the level of market concentration in MSAs based on the Herfindahl-Hirschman Index (HHI), and the share of hospitals affiliated with health systems over a span of time. 

What it Finds

• Between 1-2 health systems controlled the entire market for inpatient hospital care in nearly half (47%) of metropolitan areas in 2022.
• In more than 4-5 metropolitan areas (82%), 1-2 health systems controlled more than 75% of the market; these markets have met the definition of highly concentrated markets.
• In 79% of MSAs (with populations less than 200,000), 1-2 health systems controlled the entire market for in-patient hospital care in 2022.
• Nearly all (97%) metropolitan areas had highly concentrated markets for inpatient hospital care when applying HHI thresholds from antitrust guidelines to MSAs.
• For example, in Austin, TX, (2.4 million residents) two systems (HCA Healthcare and Ascension Health) controlled 85% of the inpatient hospital care market, though Austin is home to more than four health systems.

Why it Matters

National health spending rose to $4.5 trillion in 2022 and is projected to grow faster than GDP through 2032. Not only is this causing a rise in healthcare costs for individuals, but also employers, states, and the federal government. Almost one third of healthcare spending is funneled into hospitals. This analysis makes plain the extent to which hospitals in the U.S. have consolidated their market power, which they then use to demand higher prices from commercial insurers and health plans.

Health Care Affordability in Employer versus Private Nongroup Coverage before ARPA

Michael Karpman, Fredric Blavin, Jessica Banthin, and Vincent Pancini. Urban Institute. October 15, 2024. Available here.

This Urban Institute report compares health care affordability between families with employer-sponsored insurance (ESI) and those with private non-group coverage received through or outside of the health insurance Marketplaces. Using Medical Expenditure Panel Survey Data from 2016-2019, before the enhanced premium tax credits in the American Rescue Plan Act (ARPA) of 2021 were enacted, researchers analyze affordability measures among nonelderly adults in families where every individual had continuous full-year ESI coverage or a non-group plan.

What it Finds

• Adults with non-group coverage reported larger average per-person out-of-pocket (OOP) premiums ($2,912 vs $1,126) and health care costs ($1,010 vs $825) than adults with ESI. 
• Non-group enrollees were more than twice as likely as those with ESI to report paying at least 10% of family income towards health care costs (10.5% vs 3.8%). Among low-income adults, 24% of those with non-group coverage reported OOP health care costs exceeding 10% of income. 
• More than 1 in 3 adults with non-group coverage (36.4%) and over 1 in 5 adults with ESI (21.8%) reported delayed or forgone medical care, dental care, or prescription drugs they needed in the past 12 months because of high costs. In families with income below 400% of the federal poverty level, 27% experienced delayed or forgone care with ESI, while 41.7% experienced the same effects with non-group coverage. 
• Adults with non-group coverage were more likely than those with ESI to report problems with paying family medical bills in the past 12 months (10.2% vs 6.9%).
• Non-group enrollees had lower average incomes and greater health needs than those with ESI; the higher prevalence of affordability challenges among non-group enrollees may reflect their greater likelihood of choosing high-deductible health plans (44.6% vs 36%) and lower rates of dental coverage (24.4% vs 76.8%).

Why it Matters

This analysis shows that families with commercial health insurance face significant affordability challenges. People with individual market (non-group) insurance have had particular challenges paying for and accessing health care, compared to people with ESI. However, the enhancement of Marketplace premium tax credits enacted in ARPA, and later extended through 2025 in the Inflation Reduction Act, significantly improved affordability for non-group market enrollees. As reported, ARPA subsidies reduced out-of-pocket silver plan premiums by an average of about $1,000 for low- and moderate-income Marketplace enrollees. Over the next year, Congress must decide whether to extend the ARPA/IRA subsidies beyond 2025. If Congress fails to extend these subsidies, most of the 21.4 million current Marketplace enrollees will experience an increase in premiums, and the Congressional Budget Office has projected that millions will lose their coverage.

High-Deductible Health Insurance May Exacerbate Racial And Ethnic Wealth Disparities

Naomi Zewde, Sergio Rodriguez, and Sherry Glied. Health Affairs. October 2024. Available here. 

This Health Affairs study analyzes the impact of high-deductible health plans through the lens of racial and ethnic wealth disparities. Using Medical Expenditure Panel Survey data, researchers evaluate the net worth (from 2011-2018) and financial assets (from 2011-2016) of families with private insurance and those in high-deductible health plans (HDHP). 

What it Finds

• Low-income households had little in financial holdings; financial assets were less than $1,000 for both Black and Hispanic families in the first income quartile.
• White families ($4,100) in the lowest income quartile held financial assets that were approximately 350% greater than those held by Black ($2,200) or Hispanic ($2,000) families at a comparable level of income.
• Black and Hispanic families held substantially less wealth than White families. Black households held $68,500 in net worth at the median — approximately half the median wealth of White households ($126,200). Hispanic households fell between the two, at $88,700.
• Across all income levels, Black and Hispanic households with an HDHP and a health care savings account (HSA) held between $34,000 and $40,000 in financial assets; on the other hand, White households with an HDHP and HSA had just over $55,000 in median financial assets.

Why it Matters

This study indicates that low-income Black and Hispanic families with HDHPs and without the disposable income to contribute to HSAs, are particularly financially vulnerable. Among people with private insurance, underlying Black-White and Hispanic-White wealth gaps create structural disparities in the affordability of health services. Policy initiatives, such as the Inflation Reduction Act’s enhanced premium tax credits, may reduce out-of-pocket liabilities. This in turn can mitigate households’ need to rely on accumulated wealth to cover healthcare expenses. At the same time, proposals to expand HSAs primarily benefit higher income, White households. Policymakers should consider initiatives that reduce the need for families to maintain significant financial assets in order to access care.

Cost-Associated Unmet Dental, Vision, And Hearing Needs Among Low-Income Medicare Advantage Beneficiaries

Avni Gupta, Kenton J. Johnston, Diana Silver, David J. Meyers, Sherry A. Glied, Jose A. Pagan. Health Affairs. October 2024. Available here.

This Health Affairs study looked at data from the 2018-19 Medicare Current Beneficiary Survey (MCBS) to determine the likelihood that low-income beneficiaries report unmet needs because of cost for dental, vision, and hearing services, as well as whether a plan’s star ratings are an indicating metric in income-based disparities.

What it Finds

• Overall, 11%, 4%, and 2% of beneficiaries reported unmet dental, vision, and hearing need, respectively, due to cost considerations.
• Regardless of plan benefit generosity, low-income beneficiaries were more likely than high-income beneficiaries to report an unmet need because of cost. After adjustment, beneficiaries with incomes of 200% of poverty or less were 6.2, 1.8, and 1.9 percentage points more likely to report a dental, vision, or hearing unmet need, respectively, because of cost.
• The authors found no evidence that higher star ratings were consistently associated with lower unmet need because of cost, and more beneficiaries with an unmet dental need because of cost were enrolled in low-star plans compared to those without unmet dental need because of cost.
• The authors found that dental unmet needs due to cost, but not vision or hearing unmet needs, were lower among beneficiaries enrolled in higher star-rated plans. However, this result did not seem to result from larger quality bonuses that were paid based on previous-year ratings.

Why it Matters

A reason for the popularity of Medicare Advantage (MA) among low-income beneficiaries is that  plans often offer supplemental benefits at minimal or no premiums. However, data are not available about enrollees’ access to and use of these supplemental benefits, or the quality of those benefits. Supplemental benefits for dental, vision, or hearing services might not be contributing to equitable access for beneficiaries across income levels. Enrollment in plans, rated highly in the previous year and therefore receiving higher quality bonuses, does not lower the incidence of dental, vision, or hearing unmet needs because of cost. Currently, supplemental benefits are not standardized, contributing to Medicare beneficiary confusion amid an already complex choice landscape. Similar to the ACA Marketplaces, the percentage of MA beneficiaries who report comparing plans and benefits is lower among low-income beneficiaries, leading to them to remain in their existing plan, despite better options potentially being available.