Issue Brief #8 September 2014 Selected Health Care Trends for KEY STATISTICS FOR YOUNG ADULTS Young Adults (ages 19-25) 5.4% Growth in per capita 2007—2012 spending in 2012 5.9% Average annual growth The Patient Protection and Affordable Care Act (ACA) of 2010 required employer-sponsored health insurance (ESI) in per capita spending plans to cover enrolled members' children up to age 26 for (2007-2012) family policies issued or renewed after September 23, 2010 (Section 1001).1 In this issue brief, we assess per capita 7.8% Average annual growth health care spending and medical service use trends by in per capita spending for young adults (YA), ages 19-25, and other ESI populations in men (2007-2012) the years before and after implementation of the Section 1001 of the ACA.2 During the first two full years following 4.9% Average annual growth the passage of the ACA, 2011 and 2012, YA spending grew in per capita spending for at a rate nearly double that for the non-YA adult population.3 This increase in the relative growth rate of YA women (2007-2012) spending after 2010 was due in part to higher use of $2,168 Spending on medical certain health services – most prominently, emergency room visits and mental health and substance use (MH/SU) services per capita (2012) admissions. The rise in YA utilization observed in this brief may not be all attributable to the ACA.4 This issue brief by the Health Care Cost Institute (HCCI) examines the per capita health care expenditures and medical service use of ESI populations during 2007 to 2012 – a study period which permitted us to track YA health care trends before and after the implementation of the Section 1001 expanding coverage of adult children (see "The ACA and coverage of young adults").2,3 YA had higher rates of per capita health care spending growth than the www.healthcostinstitute.org 1 rest of the adult population aged 26 to 64 in nearly group. all years studied (Table 1). Increased YA use of However, YA per capita spending growth outpaced some medical services helped drive this growth, per capita spending on all other ESIs in 2011 and particularly in 2011 and 2012 (see "What are the medical service, subservice, and detailed service 2012. Spending per YA grew by 8.3% in 2011 and categories?"). We also found differences in YA 5.4% in 2012, rising $316 to $2,548 per YA medical service use by gender. The rise in YA between 2010 and 2012. This was noteworthy utilization may not be all atributable to the ACA, because health spending for adults ages 26 to 64 and may be due to other factors including changes continued to grow slowly after 2010 – averaging in public policy, insurance benefits, or population per year 4.9% 2007-2010 versus 3.9% per year health.4 post-2010. This compares to YA growth averaging 5.3% per year 2007-2010 and 6.9% per year post- 2010. High expenditure growth rates for YA every year except 2010 Over the six-year study period, YA annual spending Spending on YA men lower than spending on YA growth rates averaged 5.9% (Table 1). This women compares with average growth rates of 6.1% for HCCI also observed differences in spending trends children and 4.5% for adults ages 26 to 64. Health by gender (Table 1 and Figure 2). Per capita, YA care spending for the YA ESI population grew spending growth for both genders dipped in 2010 faster than spending for adults ages 26 to 64 in and rose again in 2011. Throughout the six-year every year except 2010 (Figure 1). Growth in per study period, spending grew faster for men, with capita expenditures for all of the ESI age groups the largest difference in 2011. slowed substantially in that year, and YA spending During the study period (2007-2012), average slowed to 1.9%, the lowest growth rate for any age spending for men rose from $1,341 to $1,952 YA ESI POPULATION GREW RAPIDLY THE ACA AND COVERAGE OF YOUNG ADULTS The number of YA covered by insurance increased by 3.1 Section 1001 of the ACA amended Section 2714 of the Public million between September 2010 and December 2011, Health Service Act (referred to in this issue brief as Section which was almost entirely due to an increase in private cov- 1001), it expanded health insurance coverage for young erage.11 The increase in enrollment was roughly three times adults by allowing parents to include their children through greater than the growth in the 18 to 26 population during age 25 on their family health insurance plans for policies this period.12 YA were the only age group with a meaningful issued or renewed after September 23, 2011.1 Prior to the increase in the number of insureds between 2010 and ACA, many children lost coverage upon turning 19. The ACA 2011.13 The share of YA in the ESI population with medical considers qualifying “children” as those who are coverage in the HCCI data grew 9.1% in 2011 and an addi- “dependents” for income tax purposes as defined by the tional 1.8% in 2012 (data not shown). This rise may be Internal Revenue Service.14 attributed, in large part, to the 2010 ACA requirement which expanded ESI coverage to children through age 25. www.healthcostinstitute.org 2 (+$611), while average spending for women rose from $2,472 to $3,146 (+$674). As a percentage of spending on women, spending on men rose from 54.3% in 2007 to 62.0% in 2012, a pattern of convergence that began before implementation of Section 1001 and may have been associated with the falling birth rate. In 2012, roughly 85% of YA spending – $2,168 per capita – was for health care in the medical service categories (see "What are the medical service, subservice, and detailed service categories?"), of which 23.2% was inpatient subset, 40.7% was professional, and 36.1% was outpatient claims. The For outpatient visits, 2011 was the only year in remaining 15.0% of health care spending – $375 which utilization (the number of services used), per capita – went toward prescription drugs and rather than price, was the primary driver of per YA devices. For the ESI population as a whole, about spending growth (Table 3). Increased service use 82% of spending was for medical services and 18% was especially notable for emergency room (ER) was for prescriptions.3 visits. Spending on ER visits increased 15.6% in 2011, driven by a 10.4% increase in use and 4.8% YA use of medical facilities rose in 2011 increase in prices (Table 2, Table 5, and Figure 3). In 2011, the first full year after the enactment of As a driver of inpatient spending, price played a the ACA, HCCI found an increase in YA outpatient- greater role than utilization for all age groups other service use (5.3%), outpatient visits (8.0%), throughout the study period. The number of and inpatient admissions (5.0%; Table 3 and Table admissions declined in every year studied for the 4). Per YA spending in each of these service categories also increased sharply that year. WHAT ARE MEDICAL SERVICE, SUBSERVICE, AND DETAILED WHAT ABOUT OTHER MEDICAL SERVICES FOR YOUNG SERVICE CATEGORIES? ADULTS? HCCI reports on three medical service categories: inpatient For most medical services, in all years except 2011, price facility, outpatient facility, and professional procedures. 5 growth drove spending growth (Table 2). However, for pro- HCCI also reports on three medical subservice categories: fessional procedures, use rather than prices generally drove inpatient subset, including labor and delivery, medical, surgi- spending growth during the study period, and that trend was cal, mental health, and substance use admissions; outpa- not unique to 2011. Increased use of these services (number tient visits; and outpatient-other services. These subservice of professional procedures per 1,000 insureds), rather than categories were then further classified into “detailed ser- increases in price, drove growth in per capita expenditures in vice” categories.9 every year except 2010. In that year, price growth exceeded both growth in utilization and per capita spending. Changes in prices can reflect both changes in price and in the re- sources used (intensity) to deliver care. www.healthcostinstitute.org 3 ESI population as a whole.3 Total YA admissions declined in every year except 2011 (Table 3). YA mental health and substance use admissions nearly tripled Although still relatively small as a percentage of total YA health spending, per capita YA spending on mental health and substance use (MH/SU) admissions grew nearly threefold during 2007 through 2012, with 81% of that growth coming after 2009. In 2011, MH/SU spending went up 52.3% to $64 per YA (Table 2). MH/SU admissions more than doubled from 3.9 to 8.3 per 1,000 YA between 2007 and 2012 (Table 6). MH/SU admissions per 1,000 grew an average of 8.6% per year during 2008 and 2009 and 29.8% per year in 2010 and 2011. In 2012, the growth rate slowed to 7.8%, reverting to the pre-2010 trend. Spending on MH/SU admissions rose for non-YA ESI populations as well. Per capita MH/SU spending for the ESI population as a whole went up 18.3% ($5 per insured) in 2011.6 The rate of MH/ SU admissions for the entire population, however, YA men and 7.1 MH/SU admissions per 1,000 YA did not grow appreciably. women. Among YA men between 2007 and 2012, the number of substance abuse admissions per MH/SU admissions increased more rapidly for men 1,000 grew 48% more than mental health than women during the study period (Figure 4). admission rates. Among women, admissions for Admission rates went up 146% for men during both categories rose by roughly the same amount. 2007-2012 versus 92% for women (Table 6). In 2012, there were 9.6 MH/SU admissions per 1,000 LABOR AND DELIVERY ADMISSIONS DECLINED Labor and delivery (LD) admissions covered by ESI accounted for the most admits for YA women during the study period and 10.3% ($276) of the $2,685 per capita medical spending for YA women in 2012 (Table 2). These admissions declined between 2007 and 2012 from 45 LD admissions per 1,000 YA women to 38 per 1,000 YA women (Table 6). This was consistent with other research finding a declining birth rate for YA women in the United States. 15 www.healthcostinstitute.org 4 The increase in MH/SU admissions for YA is Data and methods consistent with other research findings.7 Different In this issue brief, HCCI focuses on the years 2007 admission rates may reflect differences between through 2012 for individuals between the ages of the YA and the other ESI age groups in overall 19 and 25 and covered by ESI. This YA population health and in how they use MH/SU services. The included individuals covered by ESI as the primary extent to which the ACA contributed to the nearly beneficiary or as dependents on a spouse's or 20% increase in admissions seen in 2010 is parent's health plan. For this brief, the term health unclear, but merits further examination. Notably, care spending designates per capita spending on all some states and health plans initiated the coverage health care for all four service categories, whereas of YA in advance of the September 23, 2010 medical spending designates per capita spending on effective date.8 inpatient facility claims, outpatient claims, and professional procedures. All average annual Summary growth rates were calculated using arithmetic averages. During the study period (2007-2012), average an- nual spending grew faster for the YA population Data used to develop this brief were collected from than for the ESI population as a whole, driven pri- health care claims of beneficiaries who were marily by a surge in spending in 2011. The smallest covered by ESI and were younger than age 65 for increase in spending for YAs occurred in 2010. Alt- calendar years 2007 through 2012.9 The HCCI hough most pronounced for YAs, the spending dataset was derived from claims for about 40 slowdown in 2010 was also observed for the larger million Americans per year contributed by three ESI population and was due largely to declines in national insurers, and was also used for the 2012 utilization. Health Care Cost and Utilization Report.10 The data After 2010, YA spending growth rates quickly re- were weighted to be representative of the national turned to pre-2010 levels. In 2011, the first full ESI population. year after the ACA, YA spending grew twice as fast All data used for our study were de-identified and as spending for other adults, ages 26 through 64. Incompliant with the Health Insurance Portability contrast, the spending growth rate for non-YA and Accountability Act. We determined ESI adults after 2010 was well below the 2009 growth coverage rates using the number of insured rate.3 member months for our populations of interest. HCCI also observed substantial increases in the use Some individuals in the HCCI data were not insured of certain medical services by YA. The claims data for a full calendar year; therefore, our population showed that both mental health and substance use calculations derive from member months, not from admissions per 1,000 YA increased in every year individual members. studied with the largest increase in 2011, a trend The report does not include information about that held for both YA men and women. Additional- uninsured individuals, beneficiaries covered by ly, the number of YA ER visits increased rapidly in individual health insurance policies, or individuals 2011, helping to boost per capita spending growth insured through a public programs, such as in that year. Medicaid. As a result, the levels and changes in expenditures per capita are generalizable only for www.healthcostinstitute.org 5 beneficiaries covered by ESI and younger than age issue brief are therefore comparable across years, 65. This is a descriptive study, and its findings are regardless of population size. not causal. 3. Health Care Cost Institute. 2012 Health Care Cost HCCI analyzed per capita expenditures for all age and Utilization Report. HCCI, September 2013. groups based on service, subservice, and detailed Web. May, 29 2014. service categories. We estimated per capita 4. Some of the health care trends observed in this expenditures for the following service categories: issue brief, such as spending on substance use inpatient admissions, outpatient facility, admissions, may also be influenced by young adults professional procedures, and prescriptions. We who had coverage independent of Section 1001 of also estimated per capita expenditures for the the ACA. This may reflect broader trends in following subservice categories: inpatient subset population health that merit further examination. (admissions without skilled nursing facilities, Additional factors that may influence trends hospice, and ungroupable claims), outpatient visits, include the recession (e.g., effects of high outpatient procedures that resulted in an unemployment), legislation (such as the Mental encounter at an outpatient facility, generic Health Parity Act), changes in benefits design, and prescriptions, and brand prescriptions.5 Subservice changes in population health (such as chronic categories are further divided into a series of conditions status). The scope of this brief did not detailed service categories. More on the methods allow for investigation into this question. for calculating these categories can be found in HCCI's Analytic Methodology.9 5.The overall inpatient trends are not reported in this brief. Instead, the trends of the inpatient subset (without SNF, hospice, and ungroupable Notes claims; see "What are medical service, subservice, 1. About the Law. “Young Adult Coverage.” Depart- and detailed service categories") were reported, as ment of Health and Human Services. Web. May 6, the utilization and expenditures for these three 2014. services was very low for the YA ESI population. 2. This issue brief looked at the health care expend- 6. Health Care Cost Institute. 2012 Health Care Cost itures per capita for the YA population. It did not and Utilization Report Appendix. HCCI, September address the amount individuals or families paid out 2013. Web. May, 29 2014. -of-pocket for health care services, the total 7. Antwi, Yaa Akosa, Asako S. Moriya, and Kosali amount spent on health care for this age group, and Simon. "Access to Health Insurance and the Use of how these costs may have changed as a result of Inpatient Medical Care: Evidence from the the ACA or the recession. Moreover, it did not dis- Affordable Care Act Young Adult Mandate." NBER tinguish between those YA who were covered on Working Paper Series. National Bureau of Economic their health insurance plan as primary beneficiar- Research, June 2014. Web. July 11, 2014. ies and those that were covered as “children”. The presented statistics are “per capita” or per 1,000 8. Young Adults and the Affordable Care Act: insured, allowing for comparisons of spending and Protecting Young Adults and Eliminating Burdens utilization rates that are neutral of the rising num- on Businesses and Families. WhiteHouse.gov. Web. ber of YA insureds. The descriptive statistics in this May 2, 2014. www.healthcostinstitute.org 6 9. Health Care Cost Institute. 2012 Health Care Cost and Utilization Report Analytic Methodology v. 2.9. Authors Health Care Cost Institute, February 2013. Web. Amanda Frost, Carolina-Nicole Herrera, Paul S. May 29, 2014. Hewitt 10. Health Care Cost Institute, Inc. Aggregated ESI Cost and Utilization Dataset (2007-2012). Health Care Cost Institute, 2013. Digital file. Copyright 2014 11. Sommers, Benjamin. "Number of Young Adults Health Care Cost Institute, Inc. Gaining Insurance Due to the Affordable Care Act Unless explicitly noted, the content of this report Now Tops 3 Million." Assistant Secretary for is licensed under a Creative Commons Attribution Planning and Evaluation. Department of Health and Non-Commercial No Derivatives 4.0 License Human Services, June 2012. Web. May 29, 2014. 12. The authors estimated that the YA population grew by about 1 million between 2010 and 2012, Contact based on the Current Population Survey tables. Health Care Cost Institute, Inc. See: http://www.census.gov/population/age/. 1310 G Street NW, Suite 720 Washington, DC 20005 13. Assistant Secretary for Planning and Evaluation. 202-803-5200 "Overview of the Uninsured in the United States: A Summary of The 2011 Current Population Survey."ASPE Issue Brief. Department of Health and Human Services, September 2013. Web. May, 29 2014. 14. "Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 Under the Patient Protection and Affordable Care Act." Federal Register 75 (57 May 6454): 67 566-27140. 15. Mather, Mark. "Fact Sheet: The Decline in US Fertility." World Population Data Sheet 2012 . Population Reference Bureau, July 2012. Web. May 29, 2014. www.healthcostinstitute.org 7 Table 1. Per Capita Expenditures for Children, Young Adult, and Adult ESI Populations: 2007-2012 2007 2008 2009 2010 2011 2012 Per Capita All Ages (0-64) $3,752 $3,967 $4,219 $4,343 $4,520 $4,701 YA (19-25) $1,914 $2,022 $2,191 $2,232 $2,418 $2,548 Children (0-18) $1,814 $1,921 $2,074 $2,169 $2,339 $2,437 Adults (26-64) $4,762 $5,036 $5,341 $5,491 $5,698 $5,925 Per Capita, YA by Gender YA Men $1,341 $1,438 $1,587 $1,641 $1,849 $1,952 YA Women $2,472 $2,594 $2,781 $2,813 $2,983 $3,146 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 Percent Change All Ages (0-64) 5.7% 6.3% 2.9% 4.1% 4.0% YA (19-25) 5.7% 8.4% 1.9% 8.3% 5.4% Children (0-18) 5.9% 8.0% 4.6% 7.8% 4.2% Adults (26-64) 5.8% 6.1% 2.8% 3.8% 4.0% Percent Change, YA by Gender YA Men 7.2% 10.4% 3.4% 12.7% 5.5% YA Women 4.9% 7.2% 1.1% 6.1% 5.4% Source: HCCI, 2013. Notes: All data to represent the total population of insureds 0-64 covered by ESI. Actuarial completion was performed on data from 2011 and 2012. All per capita dollars calculated from allowed amounts. All figures rounded. www.healthcostinstitute.org 8 Table 2. Per Capita Expenditures by Service Category for Young Adults, Ages 19-25: 2007-2012 2007 2008 2009 2010 2011 2012 Per Capita by Service Category, YA Inpatient Subset 1 $392 $411 $439 $435 $489 $503 Outpatient $504 $545 $616 $643 $719 $782 Other $166 $176 $198 $207 $233 $258 Visits $339 $369 $418 $436 $486 $524 Professional $719 $749 $790 $795 $846 $883 Procedures Prescriptions – $289 $313 $342 $353 $360 $375 Filled Days 2 Brand $197 $212 $190 $201 $209 $212 Generics $92 $101 $151 $152 $151 $164 Total Medical Spending Per Capita, YA Medical3 $1,615 $1,705 $1,845 $1,873 $2,054 $2,168 Per Capita by Detailed Service Category, YA Emergency Room $174 $191 $221 $231 $267 $294 Visits Labor and $240 $254 $265 $256 $265 $276 Delivery Admissions4 Mental Health & $22 $26 $30 $38 $58 $64 Substance Use Admissions 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 Percent Change by Service Category, YA Inpatient Subset 1 4.9% 6.7% -0.9% 12.4% 3.0% Outpatient 8.1% 13.0% 4.4% 11.8% 8.8% Other 6.4% 12.4% 4.6% 12.2% 11.1% Visits 9.0% 13.3% 4.3% 11.6% 7.7% Professional 4.1% 5.5% 0.6% 6.4% 4.5% Procedures Prescriptions – 8.1% 9.3% 3.4% 1.9% 4.3% Filled Days2 Brand 7.4% -10.1% 5.8% 3.9% 1.1% Generics 9.5% 50.2% 0.5% -0.8% 8.7% Total Medical Spending Percent Change, YA Medical3 5.6% 8.2% 1.5% 9.7% 5.6% Per Capita by Detailed Service Category, YA Emergency Room 10.0% 15.3% 4.6% 15.6% 10.3% Visits Labor and 5.7% 4.3% -3.5% 3.6% 4.1% Delivery Admissions4 Mental Health & 14.3% 15.5% 29.6% 52.3% 9.2% Substance Use Admissions Source: HCCI, 2013. Notes: All data to represent the total population of insureds ages 19-25 and covered by ESI. Actuarial completion was performed on data from 2011 and 2012. All per capita dollars calculated from allowed amounts. All figures rounded. 1. Skilled nursing facility (SNF), hospice, and ungroupable claims were excluded from analysis of inpatient expenditure trends due to the lack of claims in the young adult age group. 2. Prescriptions uncategorizable as brand or generic were also analyzed, but they are not included in the tables due to very low dollar amounts. 3. Per capita spending for all inpatient subset, outpatient, and professional procedures. 4. Young adult women only. www.healthcostinstitute.org 9 Table 3. Decomposition of Expenditure Growth for Young Adults, Ages 19-25: 2011-2012 Components of 2011 Components of 2012 Expenditures Growth Expenditures Trend Expenditures Trend Prices Prices 2011 2012 Utilization Paid Utilization Paid Percent Change by Service Category, YA Inpatient Subset 1 12.4% 3.0% 5.0% 7.0% -0.7% 3.7% Outpatient 11.8% 8.8% 5.8% 5.7% 3.1% 5.6% Other 12.3% 11.1% 5.3% 6.6% 3.2% 7.6% Visits 11.6% 7.7% 8.0% 3.3% 2.3% 5.3% Professional Procedures 6.4% 4.5% 4.1% 2.2% 4.4% 0.0% Source: HCCI, 2013. Notes: All data to represent the total population of insureds ages 19-25 and covered by ESI. Actuarial completion was performed on data from 2011 and 2012. All per capita dollars calculated from allowed amounts. All figures rounded. 1. Skilled nursing facility (SNF), hospice, and ungroupable claims were excluded from analysis of inpatient expenditure trends due to the lack of claims in the young adult age group. Table 4. Utilization per 1,000 Young Adults, Ages 19-25: 2007-2012 2007 2008 2009 2010 2011 2012 Inpatient Subset 1 45 45 43 42 44 43 Outpatient 1,345 1,387 1,467 1,454 1,538 1,585 Other 1,082 1,127 1,200 1,197 1,261 1,302 Visits 263 261 268 257 277 283 Professional 8,254 8,453 8,872 8,665 9,023 9,421 Procedures 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 Percent Change by Service Category, YA Inpatient Subset 1 -1.7% -4.0% -3.0% 5.0% -0.7% Outpatient 3.1% 5.8% -0.9% 5.8% 3.1% Other 4.1% 6.5% -0.2% 5.3% 3.2% Visits -0.8% 2.6% -4.1% 8.0% 2.3% Professional 2.4% 5.0% -2.3% 4.1% 4.4% Procedures Source: HCCI, 2013. Notes: All data to represent the total population of insureds ages 19-25 and covered by ESI. Actuarial completion was performed on data from 2011 and 2012. All figures rounded. 1. Skilled nursing facility (SNF), hospice, and ungroupable claims were excluded from analysis of inpatient expenditure trends due to the lack of claims in the young adult age group. www.healthcostinstitute.org 10 Table 5. Decomposition of Expenditure Growth by Detailed Category for Young Adults, Ages 19-25: 2012 Components of 2011 Components of 2012 Expenditures Growth Expenditures Trend Expenditures Trend Prices Prices 2011 2012 Utilization Paid Utilization Paid Inpatient1 Medical 6.1% 7.0% 3.9% 2.1% -1.4% 8.6% Mental Health and Substance 52.3% 9.2% 40.1% 8.7% 8.4% 0.8% Use Surgery 16.1% -3.2% 3.0% 12.7% -10.5% 8.2% Outpatient Visits Emergency Room 15.6% 10.3% 10.4% 4.8% 3.6% 6.5% Observation 2.1% 2.9% 2.9% -0.8% -2.0% 5.0% Outpatient Surgery 7.5% 4.7% 0.4% 7.0% -1.9% 6.6% Source: HCCI, 2013. Notes: All data to represent the total population of insureds ages 19-25 and covered by ESI. Actuarial completion was performed on data from 2011 and 2012. All figures rounded. 1. Inpatient detailed categories exclude Labor and Delivery, skilled nursing facility and hospice, and ungroupable admissions in this table. Table 6. Utilization per 1,000 Young Adults by Selected Detailed Categories, by Gender: 2007-2012 2007 2008 2009 2010 2011 2012 All YAs Mental Health & Substance Use 3.9 4.2 4.6 5.5 7.7 8.3 Admissions Women Labor and Delivery 45.2 44.7 41.7 39.2 38.1 37.9 Admissions Mental Health Admissions 2.9 3.1 3.4 3.6 4.2 4.6 Substance Use Admissions 0.8 0.9 0.9 1.2 2.2 2.5 Men Mental Health Admissions 2.4 2.7 2.9 3.4 4.5 4.7 Substance Use Admissions 1.5 1.7 1.9 2.7 4.5 4.9 Source: HCCI, 2013. Notes: All data to represent the total population of insureds ages 19-25 and covered by ESI. Actuarial completion was performed on data from 2011 and 2012. All figures rounded . www.healthcostinstitute.org 11