The concept of actively shopping for healthcare services is relatively new to the current generation of consumers. Health insurance plan participants have traditionally not been exposed to significant cost sharing responsibilities and have correspondingly had little incentive to actively engage in healthcare purchasing decisions.
As of January 1, 2021, federal law requires hospitals to publicly post insurance plan specific prices for healthcare services; information needed by consumers to make these rational purchasing decisions. Given the availability of this information, how many healthcare consumers can we expect to use this information to shop for healthcare for a procedure that can be scheduled in advance like an MRI, CT scan or cataract surgery?
According to the US Census Bureau, there were 318.5 million American citizens in 2018. Of this total, 43.8 million receive health insurance coverage from Medicare, the federal program for the disabled and those 65 and over while another 64.9 million are on Medicaid, a federal-state partnership providing coverage for those of limited means. Another 4.6 million are on Tricare, a program for active-duty and retired military personnel and their families. Due to limited cost sharing benefit structures and uniform provider reimbursement rates, individuals enrolled in these programs have little incentive to actively shop for healthcare based on prices although considerations of quality and distance may still be relevant.
Of the remaining 205.2 million citizens, 157.3 million receive employer-based health insurance coverage while 19.6 million have individual, non-employer coverage. An additional 28.3 million are uninsured.
Over the past fifteen years, employer-based health insurance has undergone a gradual shift away from offering rich benefit plans with minimal cost sharing responsibilities towards high deductible health plans with considerably larger cost sharing responsibilities. These plans, which can have deductibles up to $13,800 for a family policy, now constitute the fastest growing percentage of all employer-based health insurance plans with a market share that has increased from 11.4 percent in 2006 to 46.5 percent in 2016.
Using these figures, we can confidently state that there are at least 73 million individuals (46.5 percent of the 157.3 million employer based plan participants) currently enrolled in a high-deductible health plan. If we add the 28.3 million uninsured to this figure, we can be confident that between 73 and 101 million people will be incentivized to actively shop for healthcare services in 2021.
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