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THE DIRECTIONS ARE ATTACHED.

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CASE STUDY 1: THE PROBLEM OF HIGH DEDUCTIBLES AND CONSUMER DIRECTED HEALTH CARE IN U.S. HEALTH INSURANCE
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READING 1.A. – MORAL HAZARD

Every health care finance system must struggle with the problem classically called Moral Hazard.

By its very nature, insurance dramatically lowers the price of health care to the immediate consumer. Absent cost sharing, insurance lowers the price of health care to zero.

The demand for a valued good or service that is offered wholly without cost, however, could expand infinitely. If the only cost of health care services is the time and discomfort incurred in consuming them, the demand for health care products and services is potentially (theoretically) very large.

Moral hazard is a problem with respect to virtually all kinds of insurance (and indeed is an issue whenever the possibility exists for the costs of production or consumption to be externalized – that is, for someone other than the consumer to be incurring them).

But; it is in particularly a problem with respect to health insurance because the need for many health care services is determined by the professionals who provide those services.

There is, therefore, considerable opportunity in health care for providers to induce demand for their own services. If these services are free to consumers, however, consumers have no reason to constrain their use of services. They will also have no reason to question the prices charged for services. Indeed, physicians are likely to not discuss prices with patients (and perhaps not even to know or to consider the prices of the services that they recommend).

While insured services are free to consumers, however, insurers must still pay market prices for them. If consumers do not constrain the utilization and price of health care products and serviced, there is a danger that the costs paid by insurers for health care will expand uncontrollably.

But if insurers attempt to constrain demand either through their own utilization controls or through provider incentives, it is likely that rationing will result, either by the insurers, the providers, or both. Moreover, if health care is free, consumers may forgo taking measures like eating properly, exercising, and refraining from smoking, knowing that insurance will always pay to repair the damage later after they experience the health consequences of their bad behavior.

Health policy experts generally agree that moral hazard is a problem, but disagree as to how serious a problem it is.

· Some experts believe that it is not a major problem. People rarely consume health care services unless they really need them

· Other experts believe that the real problem is consumer demand encouraged by the collective sharing of risk among members of group health insurance pans. The way to solve this problem is the imposition of varying types and levels of cost-sharing and out-of-pocket expenditures on health insurance plan members.

· Other experts believe that the real problem is NOT consumer demand but rather demand induced by providers, and that there are ways of controlling this short of imposing cost sharing on consumers.

· Still others believe that insurance-induced demand is a problem, but that cost sharing, at least if it exceeds certain limits, is more of a problem than a solution because it discourages low-income patients from getting adequate care.

· Finally, some argue that cost sharing can discourage low cost preventive or primary care, necessitating more expensive care later once medical conditions get out of hand.

READING 1. – OVERVIEW: BASICS OF THE PHILOSOPHY OF CONSUMER – DIRECTED HEALTH CARE AND HEALTH INSURANCE PLANS:

KEEP IN MIND THAT THERE IS NOT A CONSENSUS ABOUT MANY OF THE VIEWS WE ARE READING ABOUT AND WILL BE DISCUSSING.

THERE IS A FUNDAMENTAL DIFFERENCE BETWEEN ADVOCATES OF CONSUMER DIRECTED HEALTH CARE (CHDHC) AND THOSE WITH A MORE SOCIALLY ORIENTED APPROACH TO THE DEMAND FOR PERSONAL HEALTH CARE SERVICES AND THE IMPORTANCE OF BROADLY AVAILABLE GROUP HEALTH INSURANCE.

QUITE SIMPLY, CDHC ADVOCATES BELIEVE THAT PERSONAL HEALTH CARE GOODS AND SERVICES ARE PREDOMINANTLY WANTS, NOT NEEDS – IN OTHER WORDS, SPENDING ON THOSE GOODS AND SERVICES IS LIKE SPENDING FOR A LAPTOP OR IPAD, OR A CAMERA. THEY THINK IT IS LARGELY DISCRETIONARY, NOT NECESSARY, EXPENDITURE.

A. Advocates of Consumer Directed Health Care .

The influence of these Advocates is currently seen in the prevalence of and membership in Federally approved and compliant Consumer Directed Health Plans, and in the general increase in ALL kinds of employer-based health insurance plans which require high deductibles, and high levels of out-of-pocket individual and family health services expenditures. Employer and insurance company emphasis on these kinds of health insurance plans and arrangements shows the extent to which Moral Hazard is a major concern for the health insurance industry and for the U.S. Health Care system.

Moral hazard  is the danger that an insured party will lack the incentive to guard against risk when they have insurance to protect them against most or all of that risk. It is the idea that a party protected in some way from risk will act differently than if they didn’t have that protection. We encounter moral hazard every day—tenured professors becoming indifferent lecturers, people with theft insurance being less vigilant about where they park, salaried salespeople taking long breaks, and so on.

Moral hazard is usually applied to the insurance industry. Insurance companies worry that by offering payouts to protect against losses from accidents, they may actually encourage risk-taking, which results in them paying more in claims. Insurers fear that a “don’t worry, it’s insured” attitude leads to policyholders with collision insurance driving recklessly or fire-insured homeowners smoking in bed.

Advocates of Consumer Directed Health Care believe that group health insurance encourages people to purchase health goods and services they do not need, and encourages people to avoid personal responsibility for proper nutrition, seeking preventive care, and living in a healthy manner. This is because each health plan enrollee cross-subsidizes the other, and insurance substantially reduces the expense involved in accessing and using Personal Health Care Services,

These advocates are less likely to see Personal Health Care Goods and Services as necessities which are essential for the well-being of individuals and families, and are critical to the health, productivity, proper functioning and social inclusiveness and solidarity of a democratic society.

They are much more likely to think that:

· A high portion of Personal Health Care Goods and Services is discretionary (wants) rather than necessary (needs);

· Americans are over insured;

· Americans do not pay enough out of pocket for their Personal Health Care Services: and that

· If people choose (given their limits of income and wealth) not to purchase these services, they are just making a rational choice, and not jeopardizing their own welfare and that of their society.

· Moral Hazard is the principle problem with using large group health insurance to pay for Personal Health Care Goods and Services. Consumer demand for these goods and services is encouraged by the collective sharing of risk among members of group health insurance plans. The way to solve this problem is the imposition of varying types and levels of cost-sharing and out-of-pocket expenditures on health insurance plan members.

They focus on excessive demand for Personal Health Care Services, and are much less concerned about issues of access, affordability, and high prices generated by the increasing concentration of health care providers on the supply side of the U.S. Health Care system.

B. CDHC Advocates – Other Core Assumptions :

1. The Personal Health Status of Individuals and Families is very much a function of Personal Responsibility and Self-Discipline: Routine and disciplined attention to proper exercise, diet, and self-care is seen as equal to or better than an investment in the purchase and use of large group Health Insurance. Such disciplined attention to individual and family lifestyles, which is assumed to be a matter of applied willpower, will have a large long-term and medium-term impact on the levels of National Health Expenditures, and on the health status of the U.S. population as a whole.

2. Freedom of Choice, and a wide variety in the choice of self-care and health insurance options available to individual and families, are in and of themselves highly valued.

Individuals and families should have a broad range of choices as to how they will access and use health insurance, or whether they will focus more of their time and resources on exercise and proper nutrition to achieve optimal health status for themselves and the community as a whole.

Related to this is the notion that even employer-based Group Health Insurance should be offered not through limited numbers of large group plans, but through plans which are more narrowly tailored to the expected needs and preferences of employees. If you are younger and healthier, you should not be cross-subsidizing a sicker population – you should be in a healthier insurance group which experiences lower premiums.

1

Consumer-directed health plans: Do they deliver? -ROBERT WOOD JOHNSON SYNTHESES PROJECT/POLICY BRIEF NUMBER 24, OCTOBER 2012

FEDERALLY QUALIFIED CONSUMER DIRECTED HEALTH INSURANCE PLANS (CDHPs):

The definition of CDHPs is rather fluid, but they are often associated with three features:

· A relatively high annual deductible,

· A personal spending account, and

· The availability of decision support tools for enrollees.

In practice, however, not all CDHPs have all three features.

For purposes of this policy brief, a CDHP is defined as a high-deductible plan which is accompanied either by a Health Reimbursement Arrangement (HRA) or is eligible for a Health Savings Account (HSA). The majority of the research evidence on which this brief is based is from employment-based settings in which high-deductible health plans are offered with an HRA (see below).

TAX TREATMENT OF CDHPs :

The development of CDHPs was strongly influenced by federal regulations adopted in early 2000 which established favorable tax treatment for personal spending accounts. HRAs and HSAs serve similar functions, but have different rules and implications for consumers.

Health Reimbursement Arrangements: HRAs are owned by the employer and only the employer is allowed to make contributions to the account. There is no limit to employer contributions; contributions are excluded from an employee’s gross income and not subject to taxes. Although unused funds may accumulate from one year to the next, should an employee terminate employment or switch health plans, the funds may revert to the employer.

Health Savings Accounts: HSAs address one of the key limits of HRAs—a lack of portability. HSAs are owned by the individual, not the employer, making them portable across employment situations and health plans. Both employer and employee contributions to HSAs are excluded from the employee’s taxable income. Individuals and employers are allowed to establish or contribute to an HSA only when the individual is enrolled in a qualified high-deductible health plan. In 2012, the minimum qualifying deductible was $1,200 for individual and $2,400 for family coverage.

The Patient Protection and Affordable Care Act (ACA) requires the health plans to cover certain preventive services without a deductible, although some CDHPs did this prior to the ACA.

In 2006, about one in 10 employees had a health insurance deductible over

This study is forcing economists to rethink high-deductible health insurance Updated by Sarah Kliff sarah@vox.com Oct 14, 2015, 10:00am EDT

(Shutterstock)

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$1,000. Today? About half do.

To health economists, this sounded like good news; they’ve long theorized that

higher deductibles would force down health-care costs. The idea was that higher

deductibles would make patients become smarter shoppers: If they had to pay

more of the cost, they’d likely choose something closer to the $1,529

appendectomy than the $186,955 appendectomy (yes, some hospitals really do

charge that much). This would push the really expensive doctors to lower their

prices so cheaper physicians didn’t steal their business.

This was, however, just a theory. And a massive new study suggests it might have

been all wrong.

Economists Zarek Brot-Goldberg, Amitabh Chandra, Benjamin Handel, and

Jonathan Kolstad studied a firm that, in 2013, shifted tens of thousands of

workers into high-deductible insurance plans. This was a perfect moment to look

at how their patterns of care changed — whether they did, in fact, use the new

shopping tools their employer gave them to compare prices.

Turns out they didn’t. The new paper shows that when faced with a higher

deductible, patients did not price shop for a better deal. Instead, both healthy and

sick patients simply used way less health care.

“I am a little bit surprised at just how poorly patients were able to do when looking

at very similar products, like MRI scans, and with a shopping tool,” says Kolstad, an

economist at University of California Berkeley and one of the study’s co-author.

“Two years in, and there’s still no evidence they’re price shopping.”

This raises a scary possibility: Perhaps higher deductibles don’t lead to smarter

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shoppers but rather, in the long run, sicker patients.

Higher deductibles mean sick people use less health care

(Shutterstock)

Kolstad and his co-authors looked at the case of a large, unnamed company that

shifted more than 75,000 workers and their dependents from a plan with no

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deductible to one with a $3,750 deductible. When the change happened, workers

received a $3,750 subsidy to a health savings account — money they could spend

freely on whatever health costs they incurred. The company also gave workers

online tools to look up prices for doctor visits, tests, and other services they might

need.

Workers’ health spending dropped, and did so quickly. Average per-patient

spending fell from $5,222.60 in 2012 to $4,446.08 in 2013. That’s about a 15

percent decline in a single year — and it held true across all types of health

services. Between 2012 and 2014, there was a 25 percent drop in emergency

room spending, an 18 percent decline in physician office visits, and a 6 percent

decrease in mental health services.

WITH A HIGH-DEDUCTIBLE PLAN, SPENDING DROPPED 15 PERCENT IN ONE YEAR

In one sense, then, the high-deductible plan did accomplish a key goal: lower

health spending. But when the researchers looked at why spending dropped, they found it had nothing to do with smarter shopping. The average price of a doctor

visit wasn’t dropping.

Instead, under the high-deductible

plan, workers just went to the doctor

way less. The paper finds that

“spending reductions are entirely due

to outright reductions in quantity.”

Workers did use less “potentially

wasteful care,” like imaging services,

but they also cut back on “potentially

valuable care,” like preventive visits.

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Even more striking: The sickest workers were those who were most likely to

reduce their use of care while still under the deductible — even though this is the

group that needs lots of care and is most likely to blow through the deductible by

the end of the year. Once these sick workers actually exceeded their deductible,

though, use of medical services rebounded.

“People who are the most likely to go past the deductible also cut back by the

most, and they did that entirely under the deductible,” Kolstad says. “They

respond to the spot pricing [the price of receiving care right then], and that leads

to a very large reduction in care. We don’t find any evidence they look for a lower

cost. They just don’t go.”

Why does a deductible cause sick patients to forgo care?

This was the point, to me, that was most baffling in this new paper. Sick patients

would likely have some sense that they needed a lot of medical care — and that

they were probably going to hit their deductible. So why did they reduce the care

they received in the start of the year instead of ponying up the costs, hitting the

deductible early, and getting the care they thought they needed?

In some cases, you could chalk this up to a liquidity issue: A worker might not have

enough money in her checking account to pay for all the care below the $3,750

deductible. But that explanation doesn’t work here: In this case, the employer put

a $3,750 subsidy in workers’ health savings accounts.

Why wouldn’t this group get the care they wanted, pay for it with the HSA, and

just run through the out-of-pocket spending earlier in the year? Or, if they do want

to reduce spending, why wouldn’t they at least shop for a lower-cost provider

instead of forgoing care altogether?

Kolstad doesn’t have a definitive answer to this question, but he thinks it might

have a lot to do with the difficulty all of us have, as patients, guessing how much

we’ll spend on health care in a certain year. This leads us to be more averse to

upfront spending.

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It’s possible that even when we’re sick, we tend to be optimistic. We might hope

that our care costs less this year, and that maybe we’ll even be able to roll some of

our HSA account funds over to the next year.

“This is a difficult task for consumers to take on, and we now have very detailed

data to show that’s the case,” he says. “When we’ve thought about the

economics, we’ve generally thought this type of price change wouldn’t be

problematic, that sicker people would just spend their deductible and get the care

they need. This research suggests that’s not the case.”

Americans aren’t used to shopping for health care — and maybe we don’t want to start

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One study a few years ago, from the Altarum Institute, showed that Americans tend to spend more time shopping for dishwashers than for doctors — despite the latter being a rather more consequential decision.

For one thing, most of us don’t have access to tools that would let us shop for doctors. I can go on Amazon and pull up prices for dozens of different dishwashers. But there’s no website I can hop on, right now, to find out what different radiologists around Washington, DC, would charge me for an X-ray.

This study tried giving workers both the tools to compare costs and a financial incentive to go with the less expensive option. And, at least in this instance, those nudges weren’t enough to encourage patients to choose cheaper doctors. Instead of looking for a lower-cost option, workers simply decided not to go to the doctor at all.

For Kolstad, this makes him skeptical of “demand-side” interventions in health care — those that rely on consumer demands for lower health prices to ultimately lead to less medical spending.

What’s more, interventions that reduce demand could have the unintended consequence of actually raising long-term health-care costs. Think of the sick worker in a high-deductible plan who forgoes care in the early part of the year. It’s possible that skipping preventive care or not filling some prescriptions could worsen health conditions that necessitate costly interventions a few years down the line.

This study only looks at two years of a high-deductible plan, and in that time period it doesn’t show this theory bearing out. Still, Kolstad says it could be a long term possibility that we just don’t have enough data to know about yet.

“It’s certainly plausible that you will see the cost changes later,” he says. “That could manifest in lower productivity on the part of the worker, if you have people with worse health status.Those are long-run changes, but they are definitely a possibility.”

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AD

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March 2020 | Issue Brief

Disparities in Health and Health Care: Five Key Questions and Answers

Samantha Artiga, Kendal Orgera, and Olivia Pham

Executive Summary

1. What are health and health care disparities? Health and health care disparities refer to differences in health and health care between groups

that are closely linked with social, economic, and/or environmental disadvantage. Disparities occur

across many dimensions, including race/ethnicity, socioeconomic status, age, location, gender, disability

status, and sexual orientation.

2. Why do health and health care disparities matter? Disparities in health and health care not only affect the groups facing disparities, but also limit

overall gains in quality of care and health for the broader population and result in unnecessary

costs. Addressing health disparities is increasingly important as the population becomes more diverse. It

is projected that people of color will account for over half (52%) of the population in 2050.

3. What is the current status of disparities? Although the Affordable Care Act (ACA) lead to large coverage gains, some groups remain at

higher risk of being uninsured, lacking access to care, and experiencing worse health outcomes.

For example, as of 2018, Hispanics are two and a half times more likely to be uninsured than Whites

(19.0% vs. 7.5%) and individuals with incomes below poverty are four times as likely to lack coverage as

those with incomes at 400% of the federal poverty level or above (17.3% vs. 4.3%).

4. What are key initiatives to address disparities? The ACA’s coverage expansions and funding for community health centers increased access to coverage

and care for many groups facing disparities, and other provisions explicitly focused on reducing

disparities. At the federal level, the Department of Health and Human Services is engaged in a range of

actions to implement its 2011 action plan to eliminate racial and ethnic health disparities. States, local

communities, private organizations, and providers also are engaged in efforts to reduce health disparities,

which increasingly encompass a focus on social factors influencing health.

5. What are current challenges to addressing disparities? Recent policy changes and current priorities may lead to coverage declines moving forward.

Beyond coverage, there are an array of other challenges to addressing disparities, including limited

capacity to address social determinants of health, declines in funding for prevention and public health and

health care workforce initiatives, and ongoing gaps in data to measure and understand disparities.

Disparities in Health and Health Care: Five Key Questions and Answers

2

1. What are health and health care disparities? Health and health care disparities refer to differences in health and health care between groups. A

“health disparity” refers to a higher burden of illness, injury, disability, or mortality experienced by one

group relative to another.1 A “health care disparity” typically refers to differences between groups in health

insurance coverage, access to and use of care, and quality of care. Health and health care disparities

often refer to differences that are not explained by variations in health needs, patient preferences, or

treatment recommendations and are closely linked with social, economic, and/or environmental

disadvantage. The terms “health inequality” and “inequity” also are used to refer to disparities.2,3

A complex and interrelated set of individual, provider, health system, societal, and environmental

factors contribute to disparities in health and health care. Individual factors include a variety of health

behaviors from maintaining a healthy weight to following medical advice. Provider factors encompass

issues such as provider bias and cultural and linguistic barriers to patient-provider communication. How

health care is organized, financed, and delivered also shapes disparities. Moreover a broad array of

social and environmental factors affect individuals’ health and ability to engage in healthy behaviors

(Figure 1).4

Health and health care disparities are commonly viewed through the lens of race and ethnicity,

but they occur across a broad range of dimensions. For example, disparities occur across

socioeconomic status, age, geography, language, gender, disability status, citizenship status, and sexual

identity and orientation. Federal efforts to reduce disparities focus on designated priority populations who

are vulnerable to health and health care disparities, including people of color, low-income groups, women,

Figure 1

Economic

Stability

Neighborhood

and Physical

Environment

Education Food

Community

and Social

Context

Health Care

System

Employment

Income

Expenses

Debt

Medical Bills

Support

Housing

Transportation

Safety

Parks

Playgrounds

Walkability

Zip Code/

Geography

Literacy

Language

Early Childhood

Education

Vocational

Training

Higher

Education

Hunger

Access to

Healthy Options

Social

Integration

Support Systems

Community

Engagement

Discrimination

Stress

Health Coverage

Provider

Availability

Provide

Linguistic and

Cultural

Competency

Quality of Care

Health Outcomes Mortality, Morbidity, Life Expectancy, Health Care Expenditures, Health Status, Functional Limitations

Social Determinants of Healthhttps://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/

Disparities in Health and Health Care: Five Key Questions and Answers

3

children, older adults, individuals with special health care needs, and individuals living in rural and inner-

city areas.5,6,7 These groups are not mutually exclusive and often interact in important ways. Disparities

also occur within subgroups of populations. For example, there are differences among Hispanics in health

and health care based on length of time in the country, primary language, and immigration status.8,9

Research also suggests that disparities occur across the life course, from birth, through mid-life, and

among older adults.10,11

2. Why do health and health care disparities matter? Addressing disparities in health and health care is important not only from an equity standpoint,

but also for improving health more broadly by achieving improvements in overall quality of care

and population health. Moreover, health disparities are costly. Analysis estimates that disparities

amount to approximately $93 billion in excess medical care costs and $42 billion in lost productivity per

year as well as economic losses due to premature deaths.12

It is increasingly important to address health disparities as the population becomes more diverse.

It is projected that people of color will account for over half (52%) of the population in 2050, with the

largest growth occurring among Hispanics (Figure 2). There also are wide gaps in income across the

population. As of 2018, the richest 20% of households have an average income of $234,000, nearly 17

times the average income of $14,000 for the bottom 20% of households (Figure 3).13

Figure 2

61% 48%

12%

13%

18%

26%

5% 8%

3% 5%

2016 Total = 323.1M

2050 Total = 388.9M

Other

Asian

Hispanic

Black

White

NOTE: All racial groups are non-Hispanic. Other includes Native Hawaiians and Pacific Islanders, American Indian and Alaska Natives, and individuals with two or more

races. Data do not include residents of Puerto Rico, Guam, the U.S. Virgin Islands, or the Norther Mariana Islands.

SOURCE: U.S. Census Bureau, 2017 National Population Projections, Race by Hispanic Origin, 2017-2060. Available at:

https://www.census.gov/data/tables/2017/demo/popproj/2017-summary-tables.html.

Distribution of U.S. Population by Race/Ethnicity, 2016

and 2050

People

of Color:

39%

People

of Color:

52%

Disparities in Health and Health Care: Five Key Questions and Answers

4

What is the current status of disparities? Despite overall improvements in population health over time, many disparities have persisted and,

in some cases, widened.14 People of color and low-income individuals historically have faced greater

barriers to accessing care, including a higher uninsured rate, compared to Whites and those at higher

incomes.15 Data also show that disparities in some health outcomes, such as heart disease mortality

rates among Blacks and diabetes mortality rates among AIANs, have widened over time.16

The ACA led to large coverage gains for many groups facing disparities. The ACA created new

coverage options, including a Medicaid expansion and health insurance marketplaces. Following

enactment of the ACA in 2010, there were large coverage gains across racial and ethnic groups, with the

sharpest increases after implementation of the Medicaid and marketplace expansions in 2014 (Figure

4).17 Groups of color experienced larger coverage gains compared to Whites as a share of the population,

which narrowed percentage point differences in uninsured rates between groups of color and Whites.18

However, most groups of color remained more likely to be uninsured compared to Whites as of 2018.

Moreover, the relative risk of being uninsured compared to Whites did not improve for some groups. For

example, Blacks remained 1.5 times more likely to be uninsured than Whites between 2010 and 2018,

and the Hispanic uninsured rate remained over 2.5 times higher than the rate for Whites.19 Lower-income

individuals also experienced large coverage gains that narrowed percentage point differences in

uninsured rates for poor (<100% of the federal poverty level, FPL) and near-poor (100-299% FPL)

individuals compared to those at higher incomes (400% FPL and above). Relative disparities by income

also narrowed. For example, in 2010, the uninsured rate for poor individuals was five times higher than

the rate for those at higher incomes (400% FPL or above) (30.3% vs. 6.0%), while in 2018, it was four

times higher (17.3% vs. 4.3%). However, low-income groups remained more likely to be uninsured than

those at higher incomes.

Figure 3

$14,000

$64,000

$234,000

Poorest 20% of Households

Middle 20% of Households

Richest 20% of Households

NOTE: Totals rounded to the nearest 100.

SOURCE: Semega, Jessica, et al. “Income and Poverty in the United States: 2018.” Table A-4. Current Population Reports. United States Census Bureau, September

2019, https://www.census.gov/content/dam/Census/library/publications/2019/demo/p60-266.pdf.

Gaps Between Average Annual Income of Richest and

Poorest Households in the United States, 2018

Disparities in Health and Health Care: Five Key Questions and Answers

5

Beginning in 2017 and continuing in 2018, coverage gains stalled and reversed for some groups.

The uninsured rate for the total nonelderly population increased from 10.0% in 2016 to 10.4% in 2018.20

This reversal in coverage trends eroded some of the progress achieved in reducing uninsured rates for

Whites and Blacks as well as for groups with incomes above the poverty level (Figure 5).

Figure 5

-0.11%

0.60%* 0.94%*

0.65%* 0.48%*

0.79%*

-0.16% -0.35%*

-0.18%

-1.52%

<100% 100- 199%

200- 399% 400%+ White Black Hispanic Asian AIAN NHOPI

* Indicates a significant percentage-point change from 2016 to 2018.

NOTE: Includes nonelderly individuals age 0 to 64. AIAN refers to American Indiana and Alaska Native. NHOPI refers to Native Hawaiians and Other Pacific Islanders.

Changes are percentage-point changes from 2016 to 2018. The US Census Bureau’s poverty threshold for a family with two adults and one child was $20,212 in 2018.

Source: KFF analysis of 2016 and 2018 American Community Survey, 1-Year Estimates.

Change in Uninsured Rate among the Nonelderly

Population by Selected Characteristics, 2016-2018

Poverty Level (% of FPL) Race/Ethnicity

Figure 4

13.1% 12.8% 12.5% 12.3%

9.8%

7.7% 7.1%

7.3% 7.5%

19.9% 19.3% 18.9% 18.8%

14.9%

12.1% 10.7% 11.1%

11.5%

32.6% 31.3%

30.5%

30.0%

24.8%

20.6% 19.1% 18.9% 19.0%

16.7% 16.8% 16.3% 15.7%

11.2%

8.4%

7.1% 6.8%

32.0%

29.8% 30.2%

30.4%

25.6%

23.3% 22.0% 22.0% 21.8%

17.9% 17.6% 18.5%

18.1%

13.9%

9.9%

10.8% 10.6% 9.3%

2010 2011 2012 2013 2014 2015 2016 2017 2018

NOTE: Includes individuals ages 0 to 64. AIAN refers to American Indians and Alaska Natives, NHOPI refers to Native Hawaiians and Other Pacific Islanders.

SOURCE: KFF analysis of the 2010-2018 American Community Survey.

Uninsured Rates for the Nonelderly Population by Race

and Ethnicity, 2010-2018

White

Black

NHOPI

Asian

Hispanic

AIAN

Disparities in Health and Health Care: Five Key Questions and Answers

6

Many groups continue to face significant disparities in access to and utilization of care. 21 For

example, among nonelderly adults, Hispanics, Blacks, and American Indians and Alaska Natives are more

likely than Whites to delay or go without needed care (Figure 6). Moreover, nonelderly Black and Hispanic

adults are less likely than their White counterparts to have a usual source of care or to have had a health

or dental visit in the previous year.22 Low-income individuals also experience more barriers to care and

receive poorer quality care than high-income individuals.23 Disparities in access and use also occur across

other dimensions. For example, individuals living in rural areas face a range of barriers to accessing care.24

Additionally, some groups are at higher risk for health conditions and experience poorer health

outcomes compared to other groups. For example, Blacks and American Indians and Alaska Natives

are more likely than Whites to report a range of health conditions, including asthma and diabetes;

American Indians and Alaska Natives also have higher rates of heart disease compared to Whites.25

Health disparities are particularly striking in AIDS and HIV diagnoses and death rates (Figure 7).26 Infant

mortality rates are higher for Blacks and American Indians and Alaska Natives compared to Whites,27 and

Black males have the shortest life expectancy compared to other groups.28 Low-income people of all

races report worse health status than higher income individuals.29 Further, research suggests that some

subgroups of the LGBT community have more chronic conditions as well as higher prevalence and earlier

onset of disabilities than heterosexuals.30

Figure 6

13% 19%17%*

24%*21%* 25%*

10%* 19%19%*

36%*

19%* 26%

Did Not See a Doctor Due to Cost Delayed Care Due to Other Reasons

White Black Hispanic Asian AIAN NHOPI

* Indicates statistically significant difference from the White population at the p<0.05 level.

NOTE: AIAN refers to American Indians and Alaska Natives. NHOPI refers to Native Hawaiians and Other Pacific Islanders. Persons of Hispanic origin may be of any

race, but are categorized as Hispanic for this analysis; other groups are non-Hispanic. Includes nonelderly individuals 18-64 years of age.

SOURCE: KFF analysis of 2018 Behavioral Risk Factor Surveillance System.

Share of Nonelderly Adults Who Did Not Receive Care or

Delayed Care in the Past Year by Race/Ethnicity, 2018https://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/

Disparities in Health and Health Care: Five Key Questions and Answers

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3. What are key initiatives to eliminate disparities? Major recognition of health and health care disparities began nearly two decades ago. Two

Surgeon General’s reports in the early 2000s showed disparities in tobacco use and access to mental

health services by race and ethnicity.31,32 The first major legislation focused on reduction of disparities,

the Minority Health and Health Disparities Research and Education Act of 2000,33 created the National

Center for Minority Health and Health Disparities, and authorized the Agency for Healthcare Research

and Quality to regularly measure progress on reduction of disparities. Soon after, the Institute of Medicine

released two seminal reports showing racial and ethnic disparities in access to and quality of care.34,35

The ACA included provisions that advanced efforts to reduce disparities.36 The ACA’s broad

coverage expansions and increased funding for community health centers improved access to coverage

and care for many groups facing disparities. Other ACA provisions explicitly focused on reducing

disparities, such as creating Offices of Minority Health within HHS agencies to coordinate disparity

reduction efforts. The ACA also promoted workforce diversity and cultural competence, increasing

funding for health care professional and cultural competence training and education materials, and

strengthened data collection and research efforts. Moreover, the ACA included prevention and public

health initiatives and created the Prevention and Public Health Fund. It also permanently reauthorized the

Indian Health Care Improvement Reauthorization Extension Act of 2009.

As the federal level, the Department of Health and Human Services (HHS) has engaged in a range

of initiatives focused on addressing disparities. In 2011, HHS developed an action plan for eliminating

racial and ethnic health disparities, which built on the Healthy People 2020 goal to achieve health equity

Figure 7

5.6 2.3 3.0

47.5

23.8 21.120.9

8.4 5.85.4 2.1 0.5 9.6

3.2 2.0

14.4 4.2 1.7

HIV Diagnosis Rate AIDS Diagnosis Rate Death Rate for Individuals with HIV Diagnosis

White Black Hispanic Asian AIAN NHOPI

NOTE: Data based on surveillance data reported by states to the CDC. AIAN refers to American Indians and Alaska Natives. NHOPI refers to Native Hawaiians and Other

Pacific Islanders. Persons categorized by race were not Hispanic or Latino. Individuals in each race category may, however, include persons whose ethnicity was not

reported. Includes individuals age 13 and older. Data for HIV and AIDS diagnoses are as of 2018 and death rate data are as of 2017. Death rates for individuals with HIV

are deaths due to any cause, not only from HIV-related illness.

SOURCE: Centers for Disease Control and Prevention, National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention (NCHHSTP) Atlas, 2018.

HIV or AIDS Diagnosis and Death Rate per 100,000

Among Teens and Adults by Race/Ethnicity

Disparities in Health and Health Care: Five Key Questions and Answers

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and eliminate disparities.37,38,39 Since the release of the report, HHS has undertaken various efforts to

implement the plan including coordinating programmatic and policy efforts to advance health equity,

expanding access and quality of coverage and care, and strengthening the health care infrastructure and

workforce.40 In 2013, HHS updated the national standards for Culturally and Linguistically Appropriate

Services (CLAS), which seek to ensure that people receive care in a culturally and linguistically

appropriate manner.41 In 2013, the Centers for Medicare and Medicaid Services (CMS) released an

equity plan for improving quality in Medicare, and, in 2018, it released a new rural health strategy.42 Other

CMS equity initiatives include the “From Coverage to Care” initiative focused on connecting individuals to

primary and preventive services and a minority research grant program focused on designing and testing

interventions that may reduce disparities in readmissions and/or patient experience.43

States, local communities, private organizations, and providers also are engaged in efforts to

reduce health disparities, which increasingly encompass a focus on social factors influencing

health.44 State actions to reduce disparities vary considerably. A federal review found that 23 states or

territories had a strategic plan addressing minority health or health equity and that one of the most

common goals and activities of states is measure development and data collection/analysis.45 Other

activities identified included Medicaid expansion, immunization programs, and chronic disease

management efforts.46 The review further found that many states’ disparity reduction efforts focus on

particular populations, such as children, refugees, and/or individuals experiencing homelessness.47

Private funders, local communities, managed care plans, and providers also are engaged in disparities

reduction efforts.48

4. What are current challenges to addressing disparities? As noted, there were large coverage gains following the ACA, but coverage gains stalled and

began reversing in recent years. Recent policy changes and current priorities may lead to continued

declines moving forward. For example, the federal government has decreased funds for outreach and

enrollment assistance, Congress negated the ACA individual requirement to have coverage, CMS has

encouraged and approved waivers from states to add new eligibility restrictions for Medicaid coverage,

and the Department of Homeland Security made immigration policy changes that have increased fears

among immigrant families about participating in Medicaid and CHIP. Further, the Trump administration is

pursuing additional changes, such as supporting litigation to overturn the ACA, releasing guidance

allowing states to cap federal funding for Medicaid, and adding eligibility verification requirements to

Medicaid that could further curtail coverage and lead to increases in the uninsured rate.

Beyond coverage, there are an array of other challenges to addressing disparities, including

limited capacity to address social determinants of health, declines in funding for prevention and

public health and health care workforce initiatives, and ongoing gaps in data. As noted, a range of

activities are underway to address disparities, and many of these initiatives encompass a focus on social

determinants of health. Within the health care system, these efforts often are occurring through payment

and delivery system models that focus on providing whole person care and paying for value or outcomes

instead of services.49 However, the administration has begun phasing out and changing the direction ofhttps://www.kff.org/medicaid/issue-brief/medicaid-waiver-tracker-approved-and-pending-section-1115-waivers-by-state/https://www.kff.org/disparities-policy/issue-brief/estimated-impacts-of-final-public-charge-inadmissibility-rule-on-immigrants-and-medicaid-coverage/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/

Disparities in Health and Health Care: Five Key Questions and Answers

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some health care payment and delivery system reforms, which may reduce resources to address social

determinants of health.50 Moreover, addressing social determinants of health will require tackling issues

that are beyond the health care system’s capacity to address, including large deficiencies in resources to

meet social needs, such as affordable housing, and structural and institutional biases and racism.

Maintaining support for public health and prevention and expanding and diversifying the health care

workforce to increase access to culturally and linguistically appropriate care also underpin efforts to

address disparities. However, funding for prevention and public health has been reduced through cuts to

the Prevention and Public Health Fund and the President’s Fiscal Year 2021 budget includes further cuts

in this area .51,52 Further, although the ACA included provisions to enhance capacity of the health care

workforce, many of these provisions were time-limited and have not received continued funding.5354

The outcome of the 2020 national elections will have important implications for disparities moving

forward. Democratic candidates have proposed or endorsed plans, including a Medicare-for-All option

and a public option, that are designed to further expand coverage to individuals and fill in some of the

remaining gaps in coverage. Several candidates have also put forth proposals to specifically target

racial/ethnic and urban/rural health disparities, especially in maternal health. In contrast, the Trump

Administration has pursued policies focused on restricting eligibility for Medicaid, capping funding for the

program, and decreased resources for outreach and enrollment assistance. In addition, litigation

challenging the ACA with support from the Trump administration is ongoing. Moving forward, whether

policies continue to focus on expanding coverage or lead to roll-backs in available coverage options,

including restrictions to Medicaid and/or elimination of the ACA, will have major implications for

disparities.

Disparities in Health and Health Care: Five Key Questions and Answers

10

Endnotes

1 Definitions of health disparity differ. For example, the Department of Health and Human Services describes health disparities as “differences in health outcomes that are closely linked with social, economic, and environmental disadvantage” while the National Institutes of Health defines a health disparity as a “difference in the incidence, prevalence, mortality, and burden of disease and other adverse health conditions that exist among specific population groups in the United States.” United States Department of Health and Human Services, HHS Action Plan to Reduce Racial and Ethnic Health Disparities, (Washington, DC: Department of Health and Human Services, April 2011), http://minorityhealth.hhs.gov/npa/files/plans/hhs/hhs_plan_complete.pdf. “NIH Announces Institute on Minority Health and Health Disparities,” National Institutes of Health, published September 2010, https://www.nih.gov/news-events/news-releases/nih-announces-institute-minority-health-health- disparities.

2 However, they may have nuanced distinctions. For example, a health disparity, which typically refers to differences caused by social, environmental attributes, is sometimes distinguished from a health inequality, used more often in scientific literature to describe differences associated with specific attributes such as income or race. A health inequity implies that a difference is unfair or unethical. Centers for Disease Control and Prevention, “CDC Health Disparities and Inequalities Report – United States 2011,” Morbidity and Mortality Weekly Report 60 (Jan 2011):55-114. Olivia Carter-Pokras and Claudia Baquet. “What is a Health Disparity?” Public Health Reports 117 (Sep-Oct 2002): 426-434.

3 “NCHHSTP Social Determinants of Health: Frequently Asked Questions,” Centers for Disease Control and Prevention, accessed December 2019, https://www.cdc.gov/nchhstp/socialdeterminants/faq.html.

4 Samantha Artiga and Elizabeth Hinton, Beyond Health Care: The Role of Social Determinants in Promoting Health and Health Equity, (Washington, DC: KFF, May 2018), https://www.kff.org/disparities- policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health- equity/.

5 Priority Populations. Content last reviewed March 2019. Agency for Healthcare Research and Quality, Rockville, MD, https://www.ahrq.gov/topics/priority-populations/index.html.

6 “Chapter Eight: Focusing on Vulnerable Populations,” Agency for Healthcare Research and Quality, published March 1998, http://archive.ahrq.gov/hcqual/meetings/mar12/chap08.html.

7 Agency for Healthcare Research and Quality, Agency for Healthcare Research and Quality: Division of Priority Populations, (Rockville, MD: Agency for Healthcare Research and Quality, April 2016), http://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/factsheets/priority- populations/prioritypopulations_factsheet.pdf.

8 Health Coverage of Immigrants, (Washington, DC: KFF, February 2019), https://www.kff.org/disparities- policy/fact-sheet/health-coverage-of-immigrants/.

9 Samantha Artiga, Katherine Young, Elizabeth Cornachione, and Rachel Garfield, The Role of Language in Health Care Access and Utilization for Insured Hispanic Adults, (Washington, DC: KFF, November 2015), https://www.kff.org/disparities-policy/issue-brief/the-role-of-language-in-health-care-access-and- utilization-for-insured-hispanic-adults/.

10 Ibid.

11 National Academies of Sciences, Engineering, and Medicine; Health and Medicine Division; Board on Population Health and Public Health Practice; Committee on Community-Based Solutions to Promote Health Equity in the United States; Baciu A, Negussie Y, Geller A, et al., editors. Communities in Action: Pathways to Health Equity. Washington (DC): National Academies Press (US); 2017 Jan 11. 2, The State of Health Disparities in the United States. Available from: https://www.ncbi.nlm.nih.gov/books/NBK425844/.http://minorityhealth.hhs.gov/npa/files/plans/hhs/hhs_plan_complete.pdfhttps://www.nih.gov/news-events/news-releases/nih-announces-institute-minority-health-health-disparitieshttps://www.nih.gov/news-events/news-releases/nih-announces-institute-minority-health-health-disparitieshttps://www.cdc.gov/nchhstp/socialdeterminants/faq.htmlhttps://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.ahrq.gov/topics/priority-populations/index.htmlhttp://archive.ahrq.gov/hcqual/meetings/mar12/chap08.htmlhttp://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/factsheets/priority-populations/prioritypopulations_factsheet.pdfhttp://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/factsheets/priority-populations/prioritypopulations_factsheet.pdfhttps://www.kff.org/disparities-policy/fact-sheet/health-coverage-of-immigrants/https://www.kff.org/disparities-policy/fact-sheet/health-coverage-of-immigrants/https://www.kff.org/disparities-policy/issue-brief/the-role-of-language-in-health-care-access-and-utilization-for-insured-hispanic-adults/https://www.kff.org/disparities-policy/issue-brief/the-role-of-language-in-health-care-access-and-utilization-for-insured-hispanic-adults/https://www.ncbi.nlm.nih.gov/books/NBK425844/

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12 Ani Turner, The Business Case for Racial Equity, A Strategy for Growth, (W.K. Kellogg Foundation and Altarum, April 2018), https://altarum.org/publications/the-business-case-for-racial-equity-a-strategy-for- growth.

13 Jessica Semega et al., Income and Poverty in the United States: 2018 Current Population Reports, (Washington, DC: US Census Bureau, September 2019), https://www.census.gov/content/dam/Census/library/publications/2019/demo/p60-266.pdf.

14 Institute of Medicine (US). How Far Have We Come in Reducing Health Disparities? Progress Since 2000: Workshop Summary. Washington (DC): National Academies Press (US); 2012. 2, What Progress in Reducing Health Disparities Has Been Made?: A Historical Perspective. Available from: https://www.ncbi.nlm.nih.gov/books/NBK114236/.

15 2018 National Healthcare Quality and Disparities Report. Rockville, MD: Agency for Healthcare Research and Quality; September 2019. AHRQ Pub. No. 19-0070-EF. https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/nhqrdr/2018qdr-final.pdf.

16 Institute of Medicine (US). How Far Have We Come in Reducing Health Disparities? Progress Since 2000: Workshop Summary. Washington (DC): National Academies Press (US); 2012. 2, What Progress in Reducing Health Disparities Has Been Made?: A Historical Perspective. Available from: https://www.ncbi.nlm.nih.gov/books/NBK114236/.

17 KFF analysis of 2018 American Community Survey.

18 KFF analysis of 2018 American Community Survey.

19 KFF analysis of 2018 American Community Survey.

20 Jennifer Tolbert, Kendal Orgera, Natalie Singer, and Anthony Damico, Key Facts about the Uninsured Population, (Washington, DC: KFF, December 2019), https://www.kff.org/uninsured/issue-brief/key-facts- about-the-uninsured-population/.

21 Samantha Artiga and Kendal Orgera, Key Facts on Health and Health Care by Race and Ethnicity, (Washington, DC: KFF, November 2019), https://www.kff.org/disparities-policy/report/key-facts-on-health- and-health-care-by-race-and-ethnicity/.

22 Ibid.

23 National Healthcare Quality and Disparities Report. Rockville, MD: Agency for Healthcare Research and Quality; September 2019. AHRQ Publication No. 19-0070-EF. https://www.ahrq.gov/research/findings/nhqrdr/nhqdr18/index.html.

24 Julia Foutz, Samantha Artiga, and Rachel Garfield, The Role of Medicaid in Rural America, (Washington, DC: KFF, April 2017), https://www.kff.org/medicaid/issue-brief/the-role-of-medicaid-in-rural- america/.

25 Samantha Artiga and Kendal Orgera, Key Facts on Health and Health Care by Race and Ethnicity, (Washington, DC: KFF, November 2019), https://www.kff.org/disparities-policy/report/key-facts-on-health- and-health-care-by-race-and-ethnicity/.

26 Centers for Disease Control and Prevention. NCHHSTP AtlasPlus. 2018. https://www.cdc.gov/nchhstp/atlas/index.htm.

27 United States Department of Health and Human Services (US DHHS), Centers of Disease Control and Prevention (CDC), National Center for Health Statistics (NCHS), Division of Vital Statistics (DVS). Linked Birth / Infant Death Records 2007-2015, as compiled from data provided by the 57 vital statistics jurisdictions through the Vital Statistics Cooperative Program, on CDC WONDER On-line Database. Accessed at http://wonder.cdc.gov/lbd-current.html.

28 Elizabeth Arias et al., “United States Life Tables, 2017,” National Vital Statistics Reports 68(7) (June 2019), https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_07-508.pdf.https://altarum.org/publications/the-business-case-for-racial-equity-a-strategy-for-growthhttps://altarum.org/publications/the-business-case-for-racial-equity-a-strategy-for-growthhttps://www.census.gov/content/dam/Census/library/publications/2019/demo/p60-266.pdfhttps://www.ncbi.nlm.nih.gov/books/NBK114236/https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/nhqrdr/2018qdr-final.pdfhttps://www.ncbi.nlm.nih.gov/books/NBK114236/https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/https://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/https://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/https://www.ahrq.gov/research/findings/nhqrdr/nhqdr18/index.htmlhttps://www.kff.org/medicaid/issue-brief/the-role-of-medicaid-in-rural-america/https://www.kff.org/medicaid/issue-brief/the-role-of-medicaid-in-rural-america/https://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/https://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/https://www.cdc.gov/nchhstp/atlas/index.htmhttp://wonder.cdc.gov/lbd-current.htmlhttps://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_07-508.pdf

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29 Paula Braveman et al., “Socioeconomic Disparities in Health in the United States: What the Patterns Tell Us,” American Journal of Public Health 100(1) (April 2010):186-196, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2837459/.

30 Jennifer Kates, Usha Ranji, Adara Beamesderfer, Alina Salganicoff, and Lindsey Dawson, Health And Access to Care and Coverage for Lesbian, Gay, Bisexual, and Transgender Individuals in the U.S., (Washington, DC: KFF, May 2018), https://www.kff.org/disparities-policy/issue-brief/health-and-access-to- care-and-coverage-for-lesbian-gay-bisexual-and-transgender-individuals-in-the-u-s/.

31 U.S. Department of Health and Human Services, Reducing Tobacco Use: A Report of the Surgeon General, (Atlanta, Georgia: Centers for Disease Control and Prevention, 2000), http://www.cdc.gov/tobacco/data_statistics/sgr/2000/index.htm.

32 U.S. Department of Health and Human Services, Mental Health: Culture, Race, and Ethnicity. A Supplement to Mental Health: A Report of the Surgeon General, (Rockville, MD: National Institute of Mental Health, August 2001), http://www.ncbi.nlm.nih.gov/books/NBK44243/.

33 Pub. L. 106–525, Nov. 22, 2000, 114 Stat. 2495.

34 U.S. Department of Health and Human Services, Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care, (Washington, DC: Institute of Medicine, March 2002), http://www.nationalacademies.org/hmd/Reports/2002/Unequal-Treatment-Confronting-Racial-and-Ethnic- Disparities-in-Health-Care.aspx.

35 U.S. Department of Health and Human Services, Unequal Treatment: What Healthcare Providers Need to Know about Racial and Ethnic Disparities in Healthcare, (Washington, DC: Institute of Medicine, March 2002), http://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/2003/Unequal-Treatment- Confronting-Racial-and-Ethnic-Disparities-in-Health-Care/Disparitieshcproviders8pgFINAL.pdf.

36 Dennis Andrulis et al., Patient Protection and Affordable Care Act of 2010: Advancing Health Equity for Racially and Ethnically Diverse Populations, (Washington, DC: Joint Center for Political and Economic Studies, July 2010), https://nashp.org/wp- content/uploads/sites/default/files/files/webinars/joint.center.ppaca_.health.equity.report.pdf for a comprehensive and detailed overview of these provisions.

37 “About Healthy People”, Office of Disease Prevention and Health Promotion, accessed January 21, 2020, https://www.healthypeople.gov/2020/About-Healthy-People.

38 U.S. Department of Health and Human Services, HHS Action Plan to Reduce Racial and Ethnic Health Disparities, (Washington, DC, September 2011) https://www.minorityhealth.hhs.gov/npa/templates/content.aspx?lvl=1&lvlid=33&ID=285.

39 U.S. Department of Health and Human Services, Putting America’s Health First, FY2021 Budget in Brief, (Washington, DC, February 2020), https://www.hhs.gov/sites/default/files/fy-2021-budget-in- brief.pdf.

40 U.S. Department of Health and Human Services, HHS Action Plan to Reduce Racial and Ethnic Disparities: Implementation Progress Report 2011-2014, (Washington, DC: U.S. Department of Health and Human Services, November 2015), https://minorityhealth.hhs.gov/assets/pdf/FINAL_HHS_Action_Plan_Progress_Report_11_2_2015.pdf.

41 “National CLAS Standards”, U.S. Department of Health & Human Services, accessed February 12, 2020, https://thinkculturalhealth.hhs.gov/clas.

42 “Rural Health”, Centers for Medicare & Medicaid Services, accessed February 12, 2020, https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/rural-health/index.

43 “CMS Office of Minority Health”, Centers for Medicare & Medicaid Services, accessed February 12, 2020, https://www.cms.gov/About-CMS/Agency-Information/OMH.

44 Kathleen Gifford, Eileen Ellis, Aimee Lashbrook, Mike Nardone, Elizabeth Hinton, Robin Rudowitz, Maria Diaz, and Marina Tian, A View from the States: Key Medicaid Policy Changes: Results from a 50- State Medicaid Budget Survey for State Fiscal Years 2019 and 2020, (Washington, DC: KFF, Octoberhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC2837459/https://www.kff.org/disparities-policy/issue-brief/health-and-access-to-care-and-coverage-for-lesbian-gay-bisexual-and-transgender-individuals-in-the-u-s/https://www.kff.org/disparities-policy/issue-brief/health-and-access-to-care-and-coverage-for-lesbian-gay-bisexual-and-transgender-individuals-in-the-u-s/http://www.cdc.gov/tobacco/data_statistics/sgr/2000/index.htmhttp://www.ncbi.nlm.nih.gov/books/NBK44243/http://www.nationalacademies.org/hmd/Reports/2002/Unequal-Treatment-Confronting-Racial-and-Ethnic-Disparities-in-Health-Care.aspxhttp://www.nationalacademies.org/hmd/Reports/2002/Unequal-Treatment-Confronting-Racial-and-Ethnic-Disparities-in-Health-Care.aspxhttp://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/2003/Unequal-Treatment-Confronting-Racial-and-Ethnic-Disparities-in-Health-Care/Disparitieshcproviders8pgFINAL.pdfhttp://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/2003/Unequal-Treatment-Confronting-Racial-and-Ethnic-Disparities-in-Health-Care/Disparitieshcproviders8pgFINAL.pdfhttps://nashp.org/wp-content/uploads/sites/default/files/files/webinars/joint.center.ppaca_.health.equity.report.pdfhttps://nashp.org/wp-content/uploads/sites/default/files/files/webinars/joint.center.ppaca_.health.equity.report.pdfhttps://www.healthypeople.gov/2020/About-Healthy-Peoplehttps://www.minorityhealth.hhs.gov/npa/templates/content.aspx?lvl=1&lvlid=33&ID=285https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdfhttps://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdfhttps://minorityhealth.hhs.gov/assets/pdf/FINAL_HHS_Action_Plan_Progress_Report_11_2_2015.pdfhttps://thinkculturalhealth.hhs.gov/clashttps://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/rural-health/indexhttps://www.cms.gov/About-CMS/Agency-Information/OMH

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13

2019), https://www.kff.org/medicaid/report/a-view-from-the-states-key-medicaid-policy-changes-results- from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2019-and-2020/.

45 Office of Minority Health, State and Territorial Efforts to Reduce Health Disparities, (Washington, DC: U.S. Department of Health and Human Services, July 29, 2018), https://minorityhealth.hhs.gov/assets/PDF/OMH-Health-Disparities-Report-State-and-Territorial-Efforts- October-2018.pdf.

46 Ibid.

47 Ibid.

48 See for example, the Cultural-Quality-Collaborative https://www.jhsph.edu/faculty/research/map/US/1470/8309, which is a network of leading healthcare organizations that is working to share ideas, experiences, and solutions to real world problems that arise as a result of cross-cultural interactions that hinder the elimination of disparities in healthcare settings.; P. Braveman, L. Gottlieb, D. Francis, E. Arkin, and J. Acker, What Can the Health Care Sector Do to Advance Health Equity?, (Princeton, NJ: Robert Wood Johnson Foundation, November 12, 2019) https://www.rwjf.org/en/library/research/2019/11/what-can-the-health-care-sector-do-to-advance-health- equity.html; Centers for Disease Control and Prevention, “Strategies for Reducing Health Disparities – Selected CDC-Sponsored Interventions, United States, 2016” Morbidity and Mortality Weekly Report 65(1) (February 12, 2016), https://www.cdc.gov/mmwr/volumes/65/su/pdfs/su6501.pdf.

49 Tricia Brooks, Lauren Roygardner, and Samantha Artiga, Medicaid and CHIP Eligibility, Enrollment, and Cost Sharing Policies as of January 2019: Findings from a 50-State Survey, (Washington, DC: KFF, March 2019), https://www.kff.org/medicaid/report/medicaid-and-chip-eligibility-enrollment-and-cost- sharing-policies-as-of-january-2019-findings-from-a-50-state-survey/.

50 Samantha Artiga and Elizabeth Hinton, Beyond Health Care: The Role of Social Determinants in Promoting Health and Health Equity, (Washington, DC: KFF, May 2018), https://www.kff.org/disparities- policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health- equity/.

51 Matt McKillop and Vinu Ilakkuvan, The Impact of Chronic Underfunding on America’s Public Health System: Trends, Risks, and Recommendations, 2019, (Washington, DC: Trust for America’s Health, April 2019), https://www.tfah.org/wp-content/uploads/2019/04/TFAH-2019-PublicHealthFunding-06.pdf.

52 Prevention and Public Health Fund, (Washington, DC: American Public Health Association), https://www.apha.org/- /media/files/pdf/factsheets/200129_pphf_factsheet.ashx?la=en&hash=FF100DA73DBD3AF6327ABF88C 3DD42B1959FE445.

53 Taryn Morrissey, The Affordable Care Act’s Public Health Workforce Provisions: Opportunities and Challenges, (Washington, DC: American Public Health Association, June 2011), https://www.apha.org/~/media/files/pdf/topics/aca/apha_workforce.ashx.

54 Samantha Artiga and Kendal Orgera, Key Facts on Health and Health Care by Race and Ethnicity, (Washington, DC: KFF, November 2019), https://www.kff.org/disparities-policy/report/key-facts-on-health- and-health-care-by-race-and-ethnicity/.https://www.kff.org/medicaid/report/a-view-from-the-states-key-medicaid-policy-changes-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2019-and-2020/https://www.kff.org/medicaid/report/a-view-from-the-states-key-medicaid-policy-changes-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2019-and-2020/https://minorityhealth.hhs.gov/assets/PDF/OMH-Health-Disparities-Report-State-and-Territorial-Efforts-October-2018.pdfhttps://minorityhealth.hhs.gov/assets/PDF/OMH-Health-Disparities-Report-State-and-Territorial-Efforts-October-2018.pdfhttps://www.jhsph.edu/faculty/research/map/US/1470/8309https://www.rwjf.org/en/library/research/2019/11/what-can-the-health-care-sector-do-to-advance-health-equity.htmlhttps://www.rwjf.org/en/library/research/2019/11/what-can-the-health-care-sector-do-to-advance-health-equity.htmlhttps://www.cdc.gov/mmwr/volumes/65/su/pdfs/su6501.pdfhttps://www.kff.org/medicaid/report/medicaid-and-chip-eligibility-enrollment-and-cost-sharing-policies-as-of-january-2019-findings-from-a-50-state-survey/https://www.kff.org/medicaid/report/medicaid-and-chip-eligibility-enrollment-and-cost-sharing-policies-as-of-january-2019-findings-from-a-50-state-survey/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.kff.org/disparities-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/https://www.tfah.org/wp-content/uploads/2019/04/TFAH-2019-PublicHealthFunding-06.pdfhttps://www.apha.org/-/media/files/pdf/factsheets/200129_pphf_factsheet.ashx?la=en&hash=FF100DA73DBD3AF6327ABF88C3DD42B1959FE445https://www.apha.org/-/media/files/pdf/factsheets/200129_pphf_factsheet.ashx?la=en&hash=FF100DA73DBD3AF6327ABF88C3DD42B1959FE445https://www.apha.org/-/media/files/pdf/factsheets/200129_pphf_factsheet.ashx?la=en&hash=FF100DA73DBD3AF6327ABF88C3DD42B1959FE445https://www.apha.org/~/media/files/pdf/topics/aca/apha_workforce.ashxhttps://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/https://www.kff.org/disparities-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/

2/11/2021 New research shows higher health insurance costs leads to more deaths – Vox

https://www.vox.com/policy-and-politics/22276166/us-health-insurance-out-of-pocket-costs-research 1/4

A new study finds that higher copays for prescription drugs leads to patients cutting back on medications and, eventually, higher mortality rates.

The economic argument for eliminating out-of-pocket costs, in one new study. By Dylan Scott @dylanlscott dylan.scott@vox.com Feb 10, 2021, 4:10pm EST

Charging patients just $10 more for medications leads to more deaths

| Brendan Smialowski/AFP via Getty Images

It turns out $10 can be a matter of life and death, according to a new study on how

patients respond to higher health care costs.

Researchers at Harvard University and the University of California Berkeley examined what

happened when Medicare beneficiaries faced an increase in their out-of-pocket costs for

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prescription drugs. They found that a 34 percent increase (a $10.40 increase per drug) led

to a significant decrease in patients filling their prescriptions — and, eventually, a 33

percent increase in mortality.

The rise in deaths resulted from people indiscriminately cutting back on medications when

they had to pay more for them, including drugs for heart disease, hypertension, asthma,

and diabetes.

“We find that small increases in cost cause patients to cut back on drugs with large

benefits, ultimately causing their death,” the authors — Amitabh Chandra, Evan Flack, and

Ziad Obermeyer — wrote. “Cutbacks are widespread, but most striking are those seen in

patients with the greatest treatable health risks, in whom they are likely to be particularly

destructive.”

It is difficult to come up with a study design that directly measures the effect of health

insurance on health outcomes. These researchers overcame that problem by tracking the

prescription benefits for people newly enrolling in Medicare when they turn 65. People with

birthdays earlier in the year would be more likely to face higher out-of-pocket costs than

people with birthdays later in the year, given the way Medicare’s benefits are designed. By

comparing the data between the different age groups, using as a baseline an estimate of

how much the patients would have been expected to spend without any cost-sharing, the

researchers were able to isolate the effect of cost-sharing on the use of prescription drugs

and mortality rates for patients.

This finding challenges an important assumption embedded in American health care policy.

In the 1970s and ’80s, the RAND Health Insurance Experiment concluded that small

copays encouraged patients to use fewer health care services without leading to worse

health outcomes. That helped establish a new economic argument for insurers to ask their

customers to put more “skin in the game”: it would encourage more efficient use of health

care services with no downside.

But that premise presumed people would be rational. For example, if they are being asked

to pay more money for prescription drugs, they would cut back on less-valuable

medications first. The Harvard/Cal study didn’t detect any such rationality. When costs

went up, people just stopped filling their prescriptions for statins — high-value drugs that

are effective in preventing heart attacks.https://www.rand.org/health-care/projects/hie.html

2/11/2021 New research shows higher health insurance costs leads to more deaths – Vox

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The researchers explained it like this: The way patients behaved when faced with higher

out-of-pocket costs would suggest that they placed very little value on their lives. They

literally stopped taking high-value drugs because of the price.

“I never thought we would get a mortality effect of this size,” Chandra told me. “We never

thought people would be cutting back on life-saving drugs to this degree.”

If patients can’t make good value judgments, the economic argument for cost-sharing

starts to crumble, and it starts to seem like eliminating cost-sharing — increasing the

likelihood patients will continue to take the medications they need to stay alive — would be

a cheap way to “buy” people more health. As the researchers wrote, “improving the design

of prescription drug insurance offers policy makers the opportunity to purchase large gains

in health at extremely low cost per life-year.”

Bernie Sanders’s Medicare-for-all single-payer plan eliminated cost-sharing. That’s one

way to do it. Chandra said that, alternatively, the government could create new regulations

to put a limit on cost-sharing for the large employer plans that cover most working

Americans. He said Medicaid is really the model; the 70 million poor Americans enrolled in

the program generally have no out-of-pocket obligations.

Eliminating out-of-pocket costs would come with a price: Insurers would likely charge

higher premiums to offset the loss of the copays and coinsurance that currently reduce

their direct costs. But if the goal is better health outcomes, that is arguably a price worth

paying.

“If we care about the sick more than the healthy, then we should be willing to raise

premiums to reduce cost-sharing,” Chandra said. “I think a lot of American health care is

catastrophic coverage to the healthy, which is fine. That’s valuable. But it’s not as valuable

as first-dollar coverage for the sick.”

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HSA 312 – MANAGED HEALTH CARE

SPRING 2021: CONTEXT, QUESTIONS AND INSTRUCTIONS

CASE STUDY 1: THE PROBLEM OF HIGH DEDUCTIBLES AND CONSUMER DIRECTED HEALTH CARE IN U.S. HEALTH INSURANCE

DUE DATE – 11:59 PM, SUNDAY, MARCH 28, 2021

CONTEXT :UNDERSTANDING THE PROBLEM OF CONSUMER DIRECTED HEALTH PLANS AND HIGH DEDUCTIBLES:

According to research by the Commonwealth Fund, a foundation focused on health care, 21.3 percent of Americans have insurance so skimpy that they count as underinsured:

Their out-of-pocket health-care expenses, excluding premiums, amount to at least 5 to 10 percent of household income. The limits in coverage mean their plans might provide little financial protection in a health-care crisis.

High-deductible plans offered by employers are one part of the problem. Among people covered by the companies they work for, enrollment in high-deductible health plans rose from 4 percent in 2006 to 30 percent in 2019, according to a report from the Kaiser Family Foundation. The average annual deductibles in such plans are $2,583 for an individual and $5,335 for families.

· In theory, high-deductible plans, which make people spend lots of their own money before insurance kicks in, turn people into careful consumers. But research finds that people covered by such plans skip care, both unnecessary (elective cosmetic surgery, for instance) and necessary (cancer screenings and treatment, and prescriptions). Black Americans in these plans disproportionately avoid treatment, widening racial health inequities.

· Health savings accounts are designed to blunt the harmful effects of high-deductible plans: Contributions by employers, and pretax contributions by individuals, help to cover costs until the deductible is reached. But not all high-deductible health plans offer such accounts, and many people in lower-wage jobs don’t have them.

INSTRUCTIONS AND QUESTIONS

1. READ THE INDICATED READINGS, WHICH ARE ATTACHED .

2. PROVIDE WRITTEN RESPONSES TO THE QUESTIONS POSED BELOW.

· Your response via BlackBoard Assignments should have the following format and follow the rules indicated below:

· Single spaced.

· In Arial 12 font.

· Your response should be in a separate Microsoft Document attached to and submitted through Blackboard Assignment: CASE STUDY 1.

· Each section of the response should correspond to one of the Questions below – 1.A., 1.B., 2.A., 2.B., 3.A., AND 3.B. WRITE 1 SHORT PARAGRAPH FOR EACH RESPONSE.

· In your responses, without using too many sentences, use the attached documents to give your specific answer to each question.

· If you have made and posted more than one response on Blackboard, I will read, grade, and respond to your most recent response by day and date.

QUESTIONS – PROVIDE A WRITTEN RESPONSE:

RESPOND TO QUESTIONS 1, 2, AND 3, EACH OF WHICH HAS A PART A. AND PART B.

QUESTION 1: How is Consumer Directed Health Insurance Supposed to Address the Problems of Moral Hazard? – READINGS 1, 1.A. and 2.

(Using Federally Qualified Consumer Directed Health Insurance Plans as an example):

PART A.: What are the BASIC FEATURES of these high deductible health insurance plans that are supposed to encourage health plan members to make better treatment choices, and to reduce the likelihood of moral hazard?

PART B.: How are these BASIC FEATURES supposed to affect a health plan member’s choice of health care goods and services – how are they supposed to encourage and support better choices and interactions with doctors, resulting in less expensive treatments, use of lower intensity treatments, and wiser use of specialty consultations and medical imaging?

QUESTION 2: Consumer Directed Health Plans: How are they expected to work VERSUS how they actually work? READING 3.

HINT: YOUR ANSWER TO PART A. BELOW SHOULD BUILD ON YOUR ANSWER TO QUESTION 1 – THEY ARE RELATED TO EACH OTHER.

PART A.: How are enrollees in Consumer Directed Health Plans expected to act by using different kinds of provider price and quality of care information, and being aware of their cost sharing responsibilities, when they purchase health care goods and services?

PART. B.: Using one (1) example from Reading 3 – what is the evidence that people in Consumer Directed Health Plans do NOT act as the literature predicts they will when they purchase health care goods and services? Briefly describe TWO (2) KEY FINDINGS.

QUESTION 3: What are the potential problems of High Deductible Consumer Directed Health Insurance in terms of patient access to necessary Personal Health Care Services? READING 4 and READING 5.

PART A.: How might High Deductible Health Plans discourage plan members from receiving Personal Health Care Services that they need, especially during the current pandemic GIVE TWO (2) EXAMPLES.

PART. B.: Indicate ONE (1) WAY in which Consumer Directed Health Plans might be changed to solve this problem.

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