A new study explains why people in Indiana feel sick when they think about their medical bills.
INDIANAPOLIS — Health care costs in Indiana aren't much more expensive than in most parts of the country, but the average Hoosier ends up paying more. A new study from IU Indianapolis' Richard M. Fairbanks School of Public Health explains why:
Hoosier employers are more self-insured than the national average Indiana lacks accountable care organizations Indiana has a severe shortage of doctors and surgeons Hoosiers are more likely to be self-insured than other Americans Indiana spends little on public health.
The average American's health care costs are approximately $10,191 per year. In Indiana it costs approximately $10,517. That cost is paid for through insurance premiums, employer contributions, and public health spending. But in Indiana, much of that cost is paid out of pocket.
The average American would have to pay $2,710 out of pocket. In Indiana, that number is $3,155. That's an additional $445 per year, Hoosier said.
A big part of the problem is that the vast majority of Hoosiers, two out of three, have “self-insured” plans.
What is self-insurance?
There are two main ways employers can provide insurance to their employees. A fully insured plan means your employer pays the premium to your insurance company. More and more employers nationwide are adopting this approach.
But self-insurance is important in Indiana. For large employers, it may be cheaper to just cover the bill instead of paying an insurance company. This makes it cheaper for your employer, but not necessarily for you.
Many self-insured plans have high deductibles, which means you'll pay less on each check, but you'll have to pay more out-of-pocket before your insurance kicks in. . Additionally, all but the largest employers do not have the bargaining power that large insurance companies have. In many cases, you won't receive the same discount. Therefore, even with insurance, the cost of the service will be higher. Self-insured plans also do not have to follow state insurance regulations, such as coverage requirements.
But beyond who pays for health care, there aren't enough people making sure it's done right.
lack of accountability
Indiana also lacks accountable care organizations. These are groups that help coordinate care between healthcare providers to ensure high-quality services are provided without unnecessary waste. The average state has 37 ACOs, helping people get the care they deserve without unnecessary costs. There are only 20 in Indiana.
A report from Change Healthcare found that Indiana is one of only four states in the country without a plan to implement these value-based payment plans statewide.
not enough doctors
Indiana also has a severe physician shortage, even worse than the national average. Indiana has about 8% fewer family physicians per capita than the U.S. average. The number of surgeons per capita has also decreased by 14%. Those jobs also pay more, pushing up prices for everyone.
But even though Indiana doesn't have enough doctors and surgeons, it has many hospital beds per capita, 13% more than the national average.
more likely to die
Hoosiers also have poor health compared to other parts of the country. Our death rate is 15% higher than the rest of the world for all causes. For example, death rates from heart disease are 10 percent higher in Indiana than in the rest of the country, and that gap is growing. Nationwide, heart disease mortality rates have fallen by about 16% since 2020. But over the same period, Indiana actually saw an increase in death rates.
While progress is being made in Indiana, it has lagged behind the rest of the nation. Since 2020, cancer death rates have decreased by about 4% in Indiana. Nationwide, the number has decreased by more than 22%.
This is especially bad for new mothers and babies. Hoosier mothers are 35% more likely to die than mothers in other parts of the country. Newborn babies are 28% more likely to die than their out-of-state cousins.
public spending is low
And even as Hoosiers face higher mortality rates and higher out-of-pocket medical costs, the state spends far less. Indiana spends less per capita than 74% of states in the country. The Hoosiers also lack federal funding.
For comparison, Ohio pays $45 per person for public health care. In Indiana it's less than $16 per person. This is the second lowest amount in the country.
