Arizona Healthcare Dollars by Primary Market Segment and Source of Payment, 2006 (PMPM)

Out-of-pocket healthcare expenses vary considerably with the source of coverage:
- While average premiums for large and small employers are comparable, employees in small firms have much higher out-of-pocket costs.
- Health insurance purchased through the individual market is likely to have the highest levels of cost sharing, including both deductibles and co-payments. In addition, since there is no employer contribution, the individual bears the full responsibility for paying premiums. As a result, approximately 37% of the cost of services covered by these plans are actually paid out-of-pocket by individuals in the form of deductibles, co-payments, and coinsurance.
Clearly there is a trade-off between lower premiums and higher out-of-pocket costs. As PPO plans and high-deductible CDHP/HSA arrangements gain market share, this trade-off may favor healthier individuals and become a significant burden for people with chronic conditions.
People who do not have health insurance receive far fewer health care services than their counterparts with insurance coverage. However, they do receive care and pay out-of-pocket the same amount as people who are covered under a larger employer-sponsored plan. The cost of uncompensated care is borne by the system, insured individuals and society at large in the form of higher health insurance premiums and higher costs for goods and services.

Notes:

Health care expenditures shown do not include Behavioral Health Services, Long Term Care Services, or Dental Services. Except for the uninsured segment, these figures do not include expenditures on services not covered under each segment’s respective insurance products.
These figures do include administrative costs. Thus, the dollar amount labeled “plan covered” also represents the average premium cost per person, including both individual and sponsor contribution to premium.