Family HC Costs WP

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WHAT WILL US HOUSEHOLDS PAY

FOR HEALTH CARE IN THE FUTUREA BUDGET FORECAST FOR AMERICAN FAMILIES

by Matt Blackbourn

White Paper No 138

November 2015



Pioneer Institute for Public Policy Research

P983145983151983150983141983141983154rsquo983155 M983145983155983155983145983151983150Pioneer Institute is an independent non-partisan privately funded research organization that seeks

to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous

data-driven public policy solutions based on free market principles individual liberty and responsibility

and the ideal of effective limited and accountable government

Pioneer Institute is a tax-exempt 501(c)3 organization funded through the donations of individuals foundations and businessescommitted to the principles Pioneer espouses o ensure its independence Pioneer does not accept government grants

Tis paper is a the Center for Health Care Solutions which seeks to refocus the

Massachusetts conversation about health care costs away from government-imposed

interventions toward market-based reforms Current initiatives include driving public

discourse on Medicaid presenting a strong consumer perspective as the state considers

a dramatic overhaul of the health care payment process and supporting thoughtful

tort reforms

Te Center for Better Government seeks limited accountable government by promoting

competitive delivery of public services elimination of unnecessary regulation and a focus

on core government functions Current initiatives promote reform of how the state builds

manages repairs and finances its transportation assets as well as public employee benefit

reform

Te Center for School Reform seeks to increase the education options available to parentsand students drive system-wide reform and ensure accountability in public education Te

Centerrsquos work builds on Pioneerrsquos legacy as a recognized leader in the charter public school

movement and as a champion of greater academic rigor in Massachusettsrsquo elementary

and secondary schools Current initiatives promote choice and competition school-based

management and enhanced academic performance in public schools

Te Center for Economic Opportunity seeks to keep Massachusetts competitive by

promoting a healthy business climate transparent regulation small business creation in

urban areas and sound environmental and development policy Current initiatives promote

market reforms to increase the supply of affordable housing reduce the cost of doing

business and revitalize urban areas



What Will US Households Pay for Health Care in the Future

Executive Summary 5

Background 5

Methodology 7

Findings 9

Discussion 12

Conclusion 14

Appendix 17

erms and Definitions 17

About the Author 19

Endnotes 20

ABLE OF CONENS







E983160983141983139983157983156983145983158983141 S983157983149983149983137983154983161Recently published projections of nationalhealth expenditures forewarn of serious financialchallenges ahead A July 30 2015 report by theCenters for Medicare and Medicaid Services

(CMS) projects that federal health spending willgrow at an average rate of 58 percent annuallyfrom 2014-20241 On August 25 2015 theCongressional Budget Office (CBO) releaseda report projecting that spending on MedicareMedicaid the Childrenrsquos Health InsuranceProgram and the Affordable Care Actrsquos (ACA)exchange subsidies will increase from 52 percentof the countryrsquos gross domestic product (GDP)this year to 6 percent of GDP over the nextdecade2 Tese figures significantly outpace the

Federal Reserversquos projections for inflation3

17 to19 percent for 2016 and then 2 percent beyond20174

Publicly-financed health care programs face adifficult road aheadmdashbut the future outlook forthe employer-sponsored health insurance marketis equally grim Lawmakers and employers areespecially concerned about the growing burdenbusinesses will face in light of these forecastedtrends In early August 2015 the National

Business Group on Health (NBGH) released asurvey of 140 of the countryrsquos largest companiesshowing employers expect their health care coststo increase by an average of 6 percent in 20165 Some experts have projected employer health costs

will rise to rates as high as 8-9 percent next year6

Tese projections present an alarming picture forthe future fiscal condition of the United Statesand US businessesmdashbut what do they mean for

working American families

2013-2014 data shows that employer-sponsoredhealth plans covered 578 percent of the USpopulation under age 657 during this timeframeIn Massachusetts 588 percent of employeesare enrolled in employer plans as of last year8 As the majority of Americans get their healthcare through an employer plan the impact thatgrowing health costs will have on employers willhave significant implications for the way most

Americans experience their health care inthe future

If US householdsrsquo share of these health carecosts grows by the same rate as total premiumsthat NGBH predicts American families stand

to face an historic health cost-related fiscal crisisAssuming 2 percent annual growth in wages iffamily premium contributions and out-of-pocketcosts rise by 6 percent annually going forward ahousehold with one parent working 40 hours per

week will be paying $783 per working hour forhealth care by 2025 and $1403 per hour by 20359 Assuming just 4 percent increases in out-of-pocketcosts and employee contributions the average USfamily will be paying $13213 a yearmdasha fifth oftheir household incomemdashtowards health care just

ten years from now

Our paper examines this critical and largelyunexamined part of the debate surrounding risinghealth care costs today the future financial impacton US families

B983137983139983147983143983154983151983157983150983140

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More than any other time in US history

American households are feeling the pressures ofgrowing health care costs Over the last ten yearsthe total cost of a typical employer-sponsoredhealth plan for an American family jumpedfrom $11192 to $23215mdashan increase of morethan 107 percent10 Te 2012 National HealthInterview Survey found that 1 in 6 families facedfinancial difficulty paying medical bills over thecourse of 2012 and 1 in 10 families reportedthey were unable to pay their medical bills at all11 Massachusetts residents face an even larger burdenaccording to recent data In 2012 over 40 percentof non-elderly adults in Massachusetts reportedfinancial difficulty with health care costs 371percent reported problems due to health-relatedspending and 164 percent reported going withouthealth care as a result of prohibitive costs12

As prices have hit new extremes over this timeemployers have been transitioning to cost sharing




models designed to make employees responsiblefor paying a larger proportion of the costsHigh Deductible Health Plans (HDHPs) orldquoConsumer-Driven Health Plansrdquo (CDHPs) havebecome popular tools in the strategic campaign

to incentivize consumers to make more educatedand cost-conscious assessments in their healthcare choices Te goal of this shift in policy isto rein in costs generated through the structuralseparation that currently exists between patientsand providers

A Pioneer Institute study published in December2012 found that this type of insurance designpresents a number of potential benefits to bothemployees and employers including loweremployee premium contributions (a range of 11-28

percent less on average) and average savings foremployers of $1500 per employee compared toemployers that did not offer a high-deductibleoption13 Tough advocates for CDHPs haverightly pointed out that the plans have been veryeffective in driving down costs some expertshave expressed concerns that the cost-shifting ofconsumer-driven models can generate damagingoutcomes for some patientsmdashan issue wersquoll revisitlater in this paper

Concerns about cost-sharing solutions are partof a much broader issue the financial burden ofhealth care costs has increasingly shifted towardsemployees and their families A November2014 report from Aon Hewitt concluded thatemployeesrsquo share of the cost of an employer-sponsored health plan will have increased morethan 52 percent from 2010 through 2015assuming employees will be covering 236percent of the cost of the total premium this year14 Revealing similarly grim findings the Kaiser

Family Foundationrsquos 2014 Employer HealthBenefits Survey reported that average annual

worker contributions for family coverage increasedby 81 percent from 2004 to 2014 from $2661to $482315 It is worth noting that annual wagegrowth has not kept up with this rapid growth ofemployeesrsquo share of total premium payments

Unfortunately this growing burden on workers isreflected not just in rising premium contributionsbut also in out-of-pocket (OOP) expenses Forexample the average annual deductible for coveredemployees last year was 1084 percent more than

it was in 2006mdasha jump from $584 to $1217 in aspan of just 8 years16 Overall employees in 2014paid an average of $100 more per month towards acombination of rising premium contributions andpoint-of-care expenses than in 201117

o what degree can US households expect thesecosts to increase over time How much should thetypical American family be prepared to budgetfor their health-related expenses Tese are twoquestions this paper attempts to answer

Tis studyrsquos central goal is to draw attention to acritical health policy issue that if not addressedthrough significant structural changes to thecurrent system will threaten the livelihood ofmost American families o provide readers withan accurate picture of what this future system

will look like absent fundamental changes theseprojections assume a future health care system thatis structurally very similar to what exists today

with minimal adoption of alternative payment andcost saving measures Our goal was not to model

the future impact of comprehensive health reformbut to provide estimates that help illustrate a rangeof scenarios we could face in the future

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As it currently stands the US health care systemis in a troubling position each year spendingcontinues to rise inexorably without commensurateimprovements in delivery of health services

Tere is currently a very active debate on the

position of the US health care system relative tointernational peers Some studies have argued thatthe US spends more on its health care systemthan any other developed nation yet performanceand health care outcomes consistently rank amongthe worst in the industrialized world18 Toughthe appropriate methodological framework forthis comparative analysis is still subject to debatethere is wide consensus that there continue to be




fundamental issues with the efficacy and qualityof US health care relative to the high spending inthis area

As health care costs have continued to rise USlawmaking bodies and government officials have

been locked in debate over the appropriate courseof action going forward with focus on the efficacyand long-term viability of the Affordable CareAct (ACA) As recent events confirm the ACAlooks like it is here to stay Tis past June theSupreme Court ruled with a 6-3 majority thatthe federal government is permitted to establishinsurance exchanges and provide tax subsidies toassist low-income Americans in buying healthinsurance However the scope of this reform doesnot sufficiently address the issues surrounding the

growing cost burden on consumers

A significant part of the cost picture has notbeen monitored with enough scrutiny or publicdisclosure by government bodies or researchgroups the shifting burden to consumers in theform of employeersquos share of premium costs andrising OOP expenses A 2012 study from theCommonwealth Fund for instance provides anexhaustive survey of premiums and deductibles bystate noting that premiums for family coverage

increased 62 percent in aggregate from 2003 to2011 and that the cost of deductibles more thandoubled for employees in large and small firmsduring the same period Te study which offers anumber of valuable findings regarding the growingburden on consumers in the health care marketalso projects costs of family premiums going out to2020mdashthough the focus of the study is the cost oftotal family premiums not employee contributionsplus all forms of OOP costs19 In this way thestudy provides limited information on future

health care costs from the budget perspective of atypical US household

A White House report from September 2009 alsodirectly addressed the growing hardships of risinginsurance premiums on American families butthe focus of the study is narrowed to national andstate trends in total premium growth20 Tis offersa limited picture of the burden US households

face as a result of rising health care costs Toughthe study provides some valuable takeawaysincluding an assessment of the extreme disparitiesin premium increases by state and region there isno detailed analysis of the actual share of health

care costs for which US households are and willcontinue to be responsible

Our aim is to start an informed discussion byexamining available data on a more granular levelpotential future employee contributions to familypremium plans in addition to OOP costs Indoing so our goal is to show the consequences ofinaction in addressing these troubling trends inhealth cost inflation as it impacts US householdsand the increasingly larger burden consumers canexpect to face as a result In our conclusion we

offer three recommendations for a path forward(1) establish a more comprehensive and thoroughprocess for analysis of the impact of these trendson the purchasing power and economic livelihoodof American families (2) make providers workaggressively towards making health care serviceprices more transparent and accessible (3) changeregulations to allow for a more flexible high-quality and lower-cost consumer-focused healthsystem

M983141983156983144983151983140983151983148983151983143983161Central to the discussion of how rising health carecosts impact US families is the continuous riseof annual health insurance premium costs andOOP expenditures for health plan-contributorsIn evaluating growth trends in health insuranceplans this paper leaned heavily on a projectionmodel employed in a series of reports publishedin the medical journal Annals of Family Medicine In these reports authors Dr Richard Youngand Dr Jennifer DeVoe raised concerns aboutgrowing health insurance premium costs takingup an increasingly larger percentage of householdearnings

Te first report published in 2005 projected thatrising insurance premiums would make healthplans cost an amount equivalent to a typical UShouseholdrsquos yearly earnings by 2025 Tis firstreport did not include projections of employee




contributions to health plans focusing instead onprojections of total health premiums In 2012 theauthors released an updated report that includedprojections of employee contributions as well asmodified projections of total health premiums

As the authors point out in their update annualpremiums grew by an average of 8 percent from2000 through 2009 and household incomegrew by an average of 21 percent over this sametime Compare this to 2012 to 2013 whenemployer-sponsored family health premiums rose4 percent21 while US household income roseby 18 percent over the same period22 In theiradjustments Young and DeVoe also incorporatean analysis of the impact of the PPACA oninsurance premium costs Tis update included

two different modelsmdashone which assumes 8percent annual premium increases in accordance

with trends going back 10 years and one assuminga ldquomodestly favorable impactrdquo of ACA legislationprojecting a 7 percent annual increase Runningprojections based on these two assumptionsthe authors present the alarming finding thatemployee contributions to family plans whenadded to OOP expenses would eat up 50 percentof household income by 2031 and 100 percent ofincome by 204223 24

Our aim with this paper is similar to what Youngand DeVoe set out to do comprehensively assessthe future impact of rising health care costson US households However unlike Youngand DeVoersquos approach which assumes 7 and 8percent annual premium contribution growthand 6 percent growth in OOP costs our aim

was to provide a more detailed examination offuture projections with a wider range of scenariosFollowing their methodological framework we

analyzed three different projection scenariosthrough the year 2035

o more clearly illustrate these permutations we use family names to simplify our descriptionFor each of these families we offer two separatescenarios based on different projections of 4percent (scenario A) and 6 percent (scenario B)annual increases in OOP costs

I) Te first family the ldquoSmithsrdquo will experiencethe scenario with the highest increases of 8percent increases in employee contributionsto health premiums per year plus OOPannual increases of 4 percent and 6 percent

II) Our second family the ldquoJohnsonsrdquo willexperience 6 percent annual increases inemployee contributions to health premiumsper year plus OOP annual increases of 4percent and 6 percent

III) Te third family the ldquoMillersrdquo willexperience 4 percent annual increases inemployee contributions to health premiumsper year plus OOP annual increases of 4percent and 6 percent

Tese projections are based on the assumption thatemployee contributions will rise at a rate consistent

with the rate at which total premiums willincrease It is worth noting here that recent trendspoint to the fact that employee contributions tohealth plans are actually rising at higher rates thantotal premiums largely as a result of the growingmove towards cost-sharing systems amongemployers

Like Young and DeVoersquos approach we also based

our projections for OOP costs on data from themost recent Milliman Medical Index (MMI) which includes deductibles co-payments and allforms of co-insurance Te 2015 MMI report thesource of our OOP data lists average 2014 OOPexpenditures as $4065 for a family of four25 Asmentioned above for OOP expenses we projectedbased on two different scenarios 6 percent annualincreases which is the approximate average yearlyincrease of the period 2009-2014 and the figurethat DeVoe and Young used in their study and a

more optimistic projection of 4 percent increases26

For our projections of median household income we assumed yearly earnings growth of 2 percentapplied to data from the Census Bureau27 Itis important to note that this earnings growthprojection is optimistic relative to recent trendsmdashbased on data from the Census Bureau medianhousehold income only grew by an average of188 percent per year from 2001 to 2014 the most




recent year for which income data is availableFrom 2009 through 2014 US householdearnings grew by an average of just 153 percenteach year

o provide a comprehensive framework for

understanding the scope of this issue we ranseparate analyses for two different representativegroups of US workers workers in private sectorestablishments and civilian employees whichincludes private sector and localstate governmentemployees but excludes federal governmentemployees Using figures from the insurancecomponent of the Medical Expenditures PanelSurvey (MEPS)28 and 2014 income data from theUS Census Bureau our analysis includes thefollowing two components

1) Projected increases in the average annualprivate sector employee contribution (indollars) to a family health care plan plusprojected OOP expenses compared withfuture household earnings

2) Projected increases in the average annualcivilian employee contribution (in dollars) toa family health care plan plus projected OOPexpenses compared with future householdearnings

As the projected results for both groups wereextremely similar we present our results for theprivate sector below and offer a separate more

detailed summary for the civilian sector results inthe Appendix

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Te first results estimate how much moneyfamilies will be paying to cover their share of totalinsurance premiums over time o calculate this

we compared future median household incometo average employee contributions plus OOPexpenditures

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We first looked at scenario A which assumes 6percent annual increases in OOP costs for theSmith family For the Smiths who see 8 percentannual increases in employee contributions to

family plans the cost of health caremdashstrictlydefined here as their familyrsquos average privatesector employee contribution to a health care planplus total OOP expendituresmdashwill add up to$18251 by 2025 or 28 percent of their householdincome that year In the same scenario by 2035they would be paying $36562mdashequivalent to astaggering 46 percent of their household income

In scenario B which assumes a more optimistic 4percent increase per year in OOP costs the Smiths

would be paying $16792 towards health care by

2025 Put differently in just ten years the Smiths would be allocating almost 26 percent of theirbudget to health costs in this scenario By 2035

Health care costs over household income The Smiths

(8 annual increases in OOP costs)

Year 2014 2025 2035

Scenario A - 6 annual increases in OOP costs 1600 2736 4496

Scenario B - 4 annual increases in OOP costs 1600 2517 3936

Total annual health care costs The Smiths

Year 2014 2025 2035

Scenario A - 6 annual increases in OOP costs $8583 $18251 $36562

Scenario B - 4 annual increases in OOP costs $8583 $16792 $32006

Median Household Income - 2 annual increases $53657 $66716 $81326




these costs would total $32006 which would eatup just under 40 percent of the Smithsrsquo householdincome for that year

T983144983141 J983151983144983150983155983151983150983155For the Johnsons who experience 6 percent annualincreases in employee contributions to familypremiums in our cost model the numbers are stillalarming In scenario A they would be paying

just under a fourth of their income towards healthcaremdashor $16293mdashby 2025 By 2035 this figure

would be $29178 consuming 36 percent of theirhousehold income

In scenario B the Johnsons would be paying

$14834 a year towards health care in 2025

dedicating a little over 22 percent of their yearlyearnings to this part of their budget just ten

years from now By 2035 their health care costs would total $24622 or just under 31 percent of

household income

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Te family with the most favorable projectionsof 4 percent annual increasesmdashthe Millersmdashalsofaces a bleak fiscal future In scenario A theirhealth care costs would add up to $14627 by 2025

Tis total would eat up more than 22 percent ofthe Millersrsquo household income that year Tispercentage would climb up to 30 percent of theirincome by 2035mdashor $24115

FAMILYHEALTH CARE COSTS OVER TIME 2014-2035

SMITHS (8 ANNUAL GROWTH IN PREMIUM CONTRIBUTIONS)

Health care costs over household income The Johnsons

(6 annual increases in premium contributions)

Year 2014 2025 2035






In scenario B the Millers would be spending$13213 on health costs by 2025 allocating 20percent of their yearly income to this part of their

household budget that year In this same scenariotheir health care costs would total $19559 by2035 or 244 percent of their household budget

Total annual health care costs The Johnsons

Year 2014 2025 2035





JOHNSONS (6 ANNUAL GROWTH IN PREMIUM CONTRIBUTIONS)

Health care costs over household income The Millers


Year 2014 2025 2035






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Health care costs took up 16 percent of medianhousehold income last yearmdasha number that manyAmericans would agree is already too much oftheir earnings As the above scenarios illustrateevery projection of family premium contributionsplus OOP costs shows health care costs adding up

to at least 20 percent of household earnings only10 years from now but up to as high as 27 percentby that time According to our projections thisrange will be 24 percent at the lowest to 45 percentat the highest by 2035

Te principal takeaway from these findings is thateven in the most optimistic projections of healthcare cost inflation US families will be paying

an inordinate and unsustainable portion of theirannual earnings on health care costs in the future

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Tis depends on whom you ask Te 2014 owers WatsonNBGH Survey found that healthcosts in 2013 had risen a little over 4 percent

from the previous yearmdasha fifteen-year low butexpected to increase to an average of 44 percentthrough 201429 However this projection issomething of a conservative estimate comparedto other assessments Te Centers for Medicareamp Medicaid Services Office of the Actuarypublished a report in Health Affairs this past

January forecasting an average of 54 percentannual premium inflation between 2016 and

Total annual health care costs The Millers

Year 2014 2025 2035





MILLERS (4 ANNUAL GROWTH IN PREMIUM CONTRIBUTIONS)




2023 for example30 A June 2014 report fromPricewaterhouseCoopers (PwC) Health ResearchInstitute (HRI) projected health cost growthas high as 68 percent through 201531 Tesegrowth predictions all fall within the range of the

three separate scenarios we generated runningprojections for 4-8 percent Nonetheless thesethree studies forecast dramatically different costscenarios

As mentioned above US household earningsgrew by an average of just 153 percent from 2009through 2013 What if wage growth continuesat this same rate By 2025 median householdincome for a family of four would be $63411 a

year Te Smiths who experience 8 percent annualincreases in their premium contributions would

be particularly devastated by health care costs Inscenario A assuming 6 percent annual increasesin OOP costs the Smith family would be payingalmost 29 percent of their income towards healthcare in ten yearsmdashby 2035 theyrsquod be paying halfof their income in this scenario In scenario B

which assumes 4 percent annual increases in OOPcosts theyrsquod be paying more than 26 percent oftheir income towards health care by 2025 and 43percent by 2035

Assuming future wage growth commensurate with average increases between 2009-2013 the Johnsons and the Millers would also be faced with an unsustainable cost burden in their healthcosts In Scenario A the Johnsons (6 percentannual increases in premium contributions) wouldbe paying 26 percent of their income towardshealth costs by 2025 and almost 40 percent by2035mdashin Scenario B these numbers would be 23and 33 percent respectively In Scenario A theMillers (4 percent annual increases in premium

contributions) would be paying 27 percent oftheir income towards health care by 2025 and33 percent by 2035 In Scenario B they would bepaying 21 percent by 2025 and almost 27 percentby 2035

Tough this projection of annual wage growthshould be considered a ldquoworst case scenariordquo ifrecent historical trends in wage increases continue

going forward a future resembling what theseprojections reveal will not be unlikely

F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141

Tough this study is national in scopeMassachusetts is worth mentioning here for a

variety of reasons including the following 1) itis a national hub for technological advancementin medicine and is home to some of the countryrsquoshighest quality hospitals and health services 2) itoffers some of the highest-ranked health insurancecarriers in the country 3) Massachusetts passed ahealth care reform law in 2006 that laid significantgroundwork for national health care reform

Te Commonwealth has the highest premiumsfor family coverage out of all 50 states according

to 2011 data Te Commonwealth Fund studyon premiums and deductibles cited earlier in thispaper projected that Massachusetts will continueto have the highest average total premium foremployer-sponsored plans through 2020 whenthe cost of a total plan will be an estimated$27920 assuming historical average annual ratesof increase seen across states from 2003 to 2011continue32

Tough Massachusetts does have a higher median

income than most other states per capita healthcare spending in the Commonwealth is thehighest in the nationmdashlargely a function of trendstowards higher prices more regulations and higherutilization over the last decade One result of thisout-of-control spending is a damaging crowding-out of other budget areas for both governmentsand households Massachusetts households haveexperienced an especially large fiscal burdenemployee contributions for family health plansgrew by 7 percent per year from 2005 to 2011

while household income increased by just 16percent annually during this same period33 For residents that fall below the median incomeline the higher than average premium obligationspresent especially painful fiscal scenarios




C983151983150983139983148983157983155983145983151983150

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In light of the enormous growing health costburden families will face in the future inMassachusetts and beyond both state and federalgovernment bodies should take additional stepsto carefully monitor these future trends InMassachusetts the Center for Health Informationand Analysis (CHIA) already provides a surveyof employerrsquos insurance But the legislature andGovernorrsquos office should consider a statutorychange to expand the role of the agency to includein their analyses more specific data to betterconnect cost sharing trends with family healthcare costs and what they can reasonably expect inthe near future in light of recent historical trends

CHIArsquos employer and insurance surveys offer usa range of valuable metrics that help assess healthcare affordability percentage of Massachusettsemployers offering HDHPs employer share ofhealth insurance premiums as well as data onout-of-pocket spending But the budget picturefor households is still limited Lawmakers shouldconsider changing statute to ensure the agencyconducts a yearly examination similar to the oneperformed in this study to determine what share

of employer health plans and all OOP expensesMA households will be responsible for in thefuture Tis would include an annual assessmentof family premium contributions in addition toOOP expenses relative to Massachusetts medianincome with future projections based on historicaldata going back 5-years Te federal governmentshould also consider incorporating this analysisinto the reporting of consumer-focused researchgroups like the Agency for Healthcare Researchand Quality Te bottom line is that both levels

of government should closely watch the trendsdiscussed in this paper and incorporate into theirannual publications updates on what consumerscan reasonably expect to face in the future

What actions are employers taking to addressthese trends As mentioned earlier the growingpopularity of cost-sharing models reflects afundamental shift in the way employers are

managing exploding costs A survey in 2012reported that 59 percent of large employers offeredat least one form of consumer-driven plans that

yearmdashan enormous jump from just 5 percent in200334 Te same 2014 PwC report mentioned

above shows enrollment in high-deductible plansincreasing 225 percent from 2009 to 201535

It is important to note that CDHPs havedemonstrated success in health cost containmentespecially when offered with a Health SavingsAccount (HSA) or Health ReimbursementAccount (HRA) two similar categories ofaccounts that allow tax-deductible contributionsand tax-free withdrawals for qualifying medicalexpenses to mitigate the burden of OOP costs A2012 research brief from the RAND Corporation

found that the US could reduce annual healthcare costs by $57 billion if half of those coveredby employer-sponsored insurance enrolled in aconsumer-directed plan Te same brief highlightsthat families who transitioned to a CDHP spentan average of 21 percent less on medical costs overthe first year of enrollment compared to familiesstaying on traditional plans36 It is clear that thestructure of consumer-driven plans is a promisingsource of cost savings in the health insurancemarket

In spite of the proven savings a critical concernabout the shift towards cost-sharing arrangementsin the employer insurance market is that this trend

will put an even larger financial burden on UShouseholds who already must dedicate a significantportion of their income to both rising premiumsand growing OOP costs

While employers are right to move in a directionthat incentivizes employees to be more cost-

conscious consumers in their medical-relatedpurchase decisions it is important to consider allpotential outcomes of this health care deliverymodel One prominent criticism is that consumer-driven models create among patients disincentivesto seek health care services In other wordsthe concern is that consumer-driven care willencourage patients to skip necessary medicalprocedures and consultations due to higher costs




An Economic Policy Institute brief from May2013 found that shifting costs to consumerscould expose them to a higher risk of financialshocks and might lead to overall higher costs dueto reductions in the consumption of preventive

care and other forms of necessary medicalinterventions Te study also concludes that mostcost shifting measures are ldquopoorly targetedrdquo inthat they neglect the true source of rising costsand contain costs solely through reducing quantityof health care consumed and not reducing theactual price of services37 If CDHPs continue tobe used as a leading option for cost containmentin health care lawmakers must be mindful ofthese concerns to ensure consumers do not faceoverwhelming financial difficulty

A more fundamental criticism of CDHC is thatits effectiveness is predicated on the assumptionof a transparent health care marketplace whereprice and quality data are easily available Criticscontend that the marketplace as it currentlyexists does not provide sufficient informationon the prices of different health service optionsConsequently they purport that this lack oftransparency makes it impossible for consumersto perform an effective cost-benefit analysis andmake economically efficient decisions in theirpurchasing choices

Tis problem is exacerbated by the enormous variation in the pricing of medical services andprocedures Te regional price disparities betweencommon procedures are extreme and moreoften than not the price of health care deliveryis not tied to the actual quality of the service Areport from Blue Cross and Blue Shield (BCBS)earlier this year assessed pricing of knee and hipreplacement surgeries in 64 markets across the

US and found that the cost of these procedurescan vary by as much as 313 percent depending onlocation38

o ensure patients can make reasonable purchasingselections it is imperative that providers establishtransparent systems that offer consumers aconvenient means of accessing the price of medicalservices

Massachusetts was an early national leader onthis front In 2012 the Commonwealth passed alaw mandating that providers disclose the pricesof medical services and procedures to consumersEffective starting January 2014 hospitals and

clinics are legally required to provide consumers within two business days a so-called ldquoallowedamountrdquomdashthe sum of money insurance companiesagree to pay the provider in exchange for healthservices Te implementation of this legislationhowever has not had enough impact

A recent Pioneer study surveyed 23 hospitals and10 free-standing clinics in the Commonwealthrequesting price information for an MRI scanfor a left knee Te results showed that virtuallyall providers contacted lack an effective system

of price transparency In addition many ofthe providers insisted on following antiquatedprotocols that create hurdles for consumers that

violate the terms of the 2012 legislation Clearlythere is much more work to be done to ensureconsumers have access to price information As thepaper recommends providers should improve theirprocedures for handling price info requests updatetheir training requirements to ensure every requestis managed in accordance with Massachusetts lawand implement a plan to make all pricing availableelectronically via hospital websites39 Otherstates should follow Massachusettsrsquo example byintroducing similar legislation and collaborating

with provider networks to ensure the enforcementof more transparent practices

We also recommend that states establish aregulatory framework that is more patient-oriented and allows for more flexibility in ourhealth system Specifically policymakers shouldloosen restrictions on alternative delivery options

that benefit consumersmdashprincipally conveniencecare clinics (also referred to as ldquolimited serviceclinicsrdquo) which offer lower-cost health servicesfor walk-in patients at smaller retail-basedclinics Expansion of this clinical model couldgenerate significant cost savings through reducingunnecessary emergency department (ED) visitsincreasing access to preventive services such asimmunizations and providing low-cost primary




care for populations with limited coverage Teimpact of increased access will be critical giventhe projected shortage of primary care physiciansin the future An estimated fifteen million moreAmericans will be eligible for Medicaid by 2025

and upwards of thirty million new patients willenter the US health care system over this timedue to the Affordable Care Act (ACA) o keepup with the ensuing increase in demand for healthcare services over the next ten years the US

will need almost 52000 additional primary caredoctors Convenience clinics could be a valuableinstrument to address this surge in patientdemand

In conjunction with this regulation reformlawmakers should make changes to scope of

practice laws to ensure that medical professionalscan practice lsquoat the top of their licensersquomdashorprovide any treatment or care that is within thescope of their training Relaxing these restrictions

would give patients a greater level of choice inldquoshoppingrdquo for a practitioner and would generatemore competitiveness among providers helping todrive down the price of health services

Our concluding recommendations build on theargument for greater transparency and provide

specific targets for regulation reform to make theMassachusetts system more patient-oriented andconsumer-focused

bull Te Commonwealth should build on thereforms of the 2012 transparency legislationby giving consumers the ldquoright to shoprdquoproviding patients the opportunity to seek out cost estimates from out-of-network providers for better deals and be rewarded if they find a better deal

bull Government ocials should work aggressively to reform Determination of Need (DON) regulations which placeartificial restrictions on the range and variety of treatments and locations available toconsumers producing negative outcomes inhealth care delivery and driving up prices40




A983152983152983141983150983140983145983160

Te trajectories for civilian employeecontributions to family premiums are just as direas projections for private sector families41 If theSmiths were in the civilian sector they would

be paying over 27 percent of their total medianincome towards health care by 2025 and over 44percent by 2035 assuming 6 percent growth inOOP expenses If we assume 4 percent increasesin OOP costs each year the Smiths would seetheir health expenses eat up 25 percent of theirbudget just ten years from now and 39 percentby 2035

For the Johnsons family health care costs willadd up to $16061 by 2025mdashor approximately

24 percent of household earnings based on theassumption of 6 percent growth in OOP costsExtending the timeframe to 2035 shows thispercentage reaching over 35 percent in 2035($28763year) Projecting for 4 percent increasesin OOP costs this scenario shows the Johnsonspaying just over $14600 per year on premiumcontributions and OOP payments by 2025mdashjustshy of 22 percent of median household incomeby that time Tis projection shows the Johnsonrsquoshealth care costs reaching an amount equal to 30

percent of household earnings by 2035 $24207

Te Millersrsquo health cost burden will hit $14356by 2025 and $23647 by 2035 assuming OOPcosts grow by 6 percent annually Put differentlyour most favorable projection for civilian familiesshows that their health costs will be equivalentto 215 percent of household income by 2025and over 29 percent by 2035 If OOP expensesincrease by 4 percent yearly these figures will be1933 and 2347 percent respectively

T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155

Health reimbursement arrangement (HRA)An arrangement where the employer agrees toreimburse health expenses up to a set amountper year for an employee While often associated

with a high deductible health plan this is not arequirement Only the employer can fund aHRA Unused funds can be carried over to thefollowing year

Health savings account (HSA) A trust accountowned by the employee for the purpose ofpaying for medical expenses not covered by theemployerrsquos health plan Te employee must beenrolled in a high deductible health plan thatis HSA eligible in order to qualify for a HSA

Both employers and employees can contributeto a HSA Unused funds are carried over to thefollowing year HSA eligible health plans havedeductible minimums and out-of-pocket limitsthat are indexed for cost- of-living adjustmentsannually In 2013 these values were

bull A minimum annual deductible of $1250for single coverage and $2500 for family coverage

bull An annual out-of-pocket limit that does notexceed $6250 for single and $12500 forfamily coverage

bull With the exception of preventive care theannual deductible must be met before theplan benefits are paid

Premium Agreed upon fees paid for coverageof medical benefits for a defined benefit periodPremiums can be paid by employers unionsemployees or split between the insured individualand the plan sponsor All premium amounts inthe MEPS-IC tables are shown on an annualized(yearly) basis

Employee contribution Te portion of thetotal health insurance premium paid by theenrolled employee Depending on the costsharing arrangement instituted by the employerthe employee may contribute nothing to thepremium pay part of the premium or pay theentire premium All employee contributions are




shown on an annualized basis in the MEPS-ICtables Te zero contributions are included in thecalculation of averages

Deductible A fixed dollar amount during thebenefit period - usually a year - that an insured

person pays before the insurer starts to makepayments for covered medical services Plans mayhave both per individual and family deductiblesSome plans may have separate deductibles forspecific services For example a plan may havea hospitalization deductible per admissionDeductibles may differ if services are receivedfrom an approved provider or if received fromproviders not on the approved list

Copayment A form of medical cost sharing in

a health insurance plan that requires an insuredperson to pay a fixed dollar amount when amedical service is received regardless of the totalcharge for service Te insurer is responsible forthe rest of the reimbursement Tere may beseparate copayments for different services Forexample an enrollee may pay a $25 copay foreach doctorrsquos office visit $150 for each day in thehospital and $20 for each prescription Someplans require that a deductible first be met forsome specific services before a copayment applies

Coinsurance A form of medical cost sharing ina health insurance plan that requires an insuredperson to pay a stated percentage of medicalexpenses after the deductible amount if any

was paid Once any deductible amount andcoinsurance are paid the insurer is responsible forthe rest of the reimbursement for covered benefitsup to allowed charges the individual could alsobe responsible for any charges in excess of whatthe insurer determines to be ldquousual customary

and reasonablerdquo Coinsurance rates may differ ifservices are received from an approved provider(ie a provider with whom the insurer has acontract or an agreement specifying paymentlevels and other contract requirements) or ifreceived by providers not on the approved list Inaddition to overall coinsurance rates rates mayalso differ for different types of services

Private sector All economic activity other thanthat of government In the MEPS-IC survey theprivate sector excludes the unincorporated self-employed with no employees However the self-employed with employees and the incorporatedself- employed with no employees are included

bull For prot incorporated A private sectorfirm that is granted a charter recognizingit as a separate legal entity having its ownprivileges and liabilities separate from thoseof its members

bull For prot unincorporated A private sectorfirm with a sole owner or a partnership

where two or more persons join to carryon a trade or business with each having a

shared financial interest in the business Te MEPS-IC survey does not includeunincorporated self-employed sole owners

with no employees

bull Nonprot A private sector rm that doesnot distribute surplus funds to its owners orshareholders but instead uses surplus fundsto help pursue its goals Most nonprofits areexempt from taxes

State and local governments (Public sector)

Te public sector is the portion of the economyconsisting of various levels of government TeMEPS-IC survey only collects public sector datafrom State and local governments Te Federalgovernment (including the postal system andthe military) are not included in the MEPS-IC Where possible the term State and localgovernment is used instead of public sector asit more accurately describes the coverage of theMEPS-IC survey

Civilian A combination of both private sectorand State and local governments




About the Author Matt Blackbourn is Pioneerrsquos Research ampOperations Associate Matt manages PioneerrsquosBetter Government Competition outreach effortand its internship program He is also involved

with the Institutersquos government transparencyinitiative and assists with research for the Centerfor Better Government Matt holds a Bachelorof Arts in Political Science and Philosophy from

ulane University where he was elected to PhiBeta Kappa and graduated summa cum laude

About Pioneer

Pioneer Institute is an independent non-partisan privately funded research organizationthat seeks to change the intellectual climate inthe Commonwealth by supporting scholarship

that challenges the ldquoconventional wisdomrdquo onMassachusetts public policy issues

Recent Publications

Driving Critical Reforms at DCF Ideas for a

Direction Forward in Massachusettsrsquo Child and

Family Services White Paper November 2015

How PARCCrsquos False Rigor Stunts the Academic

Growth of All Students White Paper October 2015

Bay State Specialists and Dentists Get Mixed Reviewson Price ransparency White Paper August 2015

Modeling Urban Scholarship Vouchers in

Massachusetts White Paper July 2015

Federal Overreach and Common Core White Paper July 2015

Te Pacheco Law Has Cost the MBA More than

$450 Million White Paper July 2015

Mass Hospitals Weak on Price ransparency Policy

Brief June 2015

185 Devonshire Street Suite 1101 | Boston MA 02110 | 6177232277 | wwwpioneerinstituteorg




Endnotes

1 Centers for Medicare amp Medicaid Services National Health Expenditure Projections 2014-2024 July 2014httpswwwcmsgovResearch-Statistics-Data-and-SystemsStatistics-rends-and-ReportsNationalHealthExpendDataNationalHealthAccountsProjectedhtml

2 Congressional Budget Office An Update to the Budget and Economic Outlook 2015 to 2025 August 2015

httpswwwcbogovpublication507243 Te Federal Reserversquos inflation projections are based on percent changes from the fourth quarter of the previous year

to the fourth quarter of the year indicated and provide rates of change in the price index for personal consumptionexpenditures

4 Te Federal Reserve Economic Projections of Federal Reserve Board Members and Federal Reserve Bank PresidentsMarch 2015 httpwwwfederalreservegovmonetarypolicyfilesfomcprojtabl20150318pdf

5 Emerman E US Employers Changing Health Benefit Plans to Control Rising Costs Comply with ACA NationalBusiness Group on Health Survey Finds August 2015httpswwwbusinessgrouphealthorgpressroompressReleasecfmID=234

6 Livingston S Health care premiums rise more increases coming August 2015 httpwwwbusinessinsurancecomarticle20150826NEWS03150829885health-care-premiums-rise-more-increases-coming

7 Vitsnes J David K Miller E Statistical Brief 477 Results from the 2014 MEPS-IC Private-Sector National ables Medical Expenditure Panel Survey June 2015httpmepsahrqgovmepswebdata_filespublicationsst477stat477pdf

8 Center for Health Information and Analysis Findings from the 2014 Massachusetts Health Insurance Survey May2015 httpchiamassgovassetsdocsrpubs15MHIS-Reportpdf

9 Tis hourly rate assumes a 2080-hour work year

10 Engdahl-Johnson J Mayne L 2014 Milliman Medical Index 2014httpwwwmillimancomuploadedFilesinsightPeriodicalsmmipdfs2014-mmipdf

11 Cohen RA Kirzinger WK Financial Burden of Medical Care A Family Perspective January 2014httpwwwcdcgovnchsdatadatabriefsdb142htm

12 Long SK Nordahl K Seifert R Coverage and Access Remain Strong But Costs are Still a Concern Summary ofthe 2012 Massachusetts Health Reform Survey March 2014httpwwwbluecrossmafoundationorgsitesdefaultfilesdownloadpublicationMHRS_Summarypdf

13 Lischko A Consumer Driven Health Care A New Agenda for Cost Control in Massachusetts December 2012httppioneerinstituteorgfeaturedconsumer-driven-health-care-a-proven-strategy-for-managing-health-care-cost-growth

14 Aon Hewitt Aon Hewitt Analysis Shows Upward rend in US Health Care Cost Increases November 2014httpiraoncomabout-aoninvestor-relationsinvestor-newsnews-release-details2014Aon-Hewitt-Analysis-Shows-Upward-rend-in-US-Health-Care-Cost-Increasesdefaultaspx

15 Te Kaiser Family Foundation and Health Research amp Educational rust Employer Health Benefits 2014 Annual

Survey httpskaiserfamilyfoundationfileswordpresscom2014098625-employer-health-benefits-2014-annual-survey6pdf

16 Te Kaiser Family Foundation and Health Research amp Educational rust KaiserHRE Survey of Employer-Sponsored Health Benefits 2006-2014 Summary of Findingshttpkfforgreport-sectionehbs-2014-summary-of-findings

17 owers Watson and the National Business Group on Health Te New Health Care Imperative DrivingPerformance Connecting to Value 19th National Business Group on Health Employer Survey on PurchasingValue in Health Care May 2014 httpwwwtowerswatsoncomen-USInsightsIC-ypesSurvey-Research-Results201405full-report-towers-watson-nbgh-2013-2014-employer-survey-on-purchasing-value-in-health-care




18 Davis K Stremikis K Squires D Schoen C Mirror Mirror on the Wall 2014 Update How the US Health CareSystem Compares Internationally June 2014httpwwwcommonwealthfundorgpublicationsfund-reports2014junmirror-mirror

19 Schoen C Lippa J Collins S Radley S State rends in Premiums and Deductibles 2003-2011 ErodingProtection and Rising Costs Underscore Need for Action December 2012httpwwwcommonwealthfundorg~mediaFilesNewsNews20Releases2012Dec1648_Schoen_state_trends_premiums_deductibles_2003_2011_1210_EMBARGOpdf

20 Te Executive Office of the President Te Burden of Health Insurance Premium Increases on American FamiliesSeptember 2009 httpswwwwhitehousegovassetsdocumentsHealth_Insurance_Premium_Reportpdf

21 Te Kaiser Family Foundation and Health Research amp Educational rust 2013 Employer Health Benefits SurveyAugust 2013 httpkfforgreport-sectionehbs-2013-section-1

22 US Census Bureau Median Household Income by State 1984 to 2013 able H-8httpwwwcensusgovhheswwwincomedatahistoricalhousehold

23 Young R DeVoe J Who Will Have Health Insurance in the Future An Updated Projection MarchApril 2012httpwwwannfammedorgcontent102156fullpdf+html

24 Tough the focus of this paper is employee contributions + OOP costs Young amp DeVoe offer numerous findingsbased on analysis of total family premiums vs future household income According to their updated study a familyhealth insurance premium would be equivalent to the average US householdrsquos yearly earnings by 2033 at annualincreases of 8 percent with a delay of only 4 years assuming moderate impact by the ACA (7 percent growth per year)in slowing insurance premium inflation

25 Engdahl-Johnson J Mayne L 2015 Milliman Medical Index 2015httpwwwmillimancomuploadedFilesinsightPeriodicalsmmi2015-MMIpdf

26 Te Affordable Care Act does establish an out-of-pocket maximum per policy period including deductiblescoinsurnace and copayments Te OOP limit for any individual Marketplace plan for 2015 is $13200 for a familyplanmdasha figure our projections do not surpass until 2035 at which point it can be reasonably assume this l imited willbe adjusted for inflation

27 Te Census Bureau defines this income as earnings ldquoreceived on a regular basis (exclusive of certain money receiptssuch as capital gains) before payments for personal income taxes social security union dues Medicare deductionsetcrdquo

28 Our projections for employee premium contributions are based on 2014 data from the national-level InsuranceComponent of MEPS As the MEPS website describes this component ldquofields questionnaires to private and publicsector employers to collect data on the number and types of private health insurance plans offered benefits associated

with these plans annual premiums annual contributions by employers and employees eligibility requirements andemployer characteristicsrdquo

29 owers Watson and the National Business Group on Health Te New Health Care Imperative DrivingPerformance Connecting to Value 19th National Business Group on Health Employer Survey on PurchasingValue in Health Care May 2014 httpwwwtowerswatsoncomen-USInsightsIC-ypesSurvey-Research-

Results201405full-report-towers-watson-nbgh-2013-2014-employer-survey-on-purchasing-value-in-health-care 30 Hartman M Martin A Lassman D Catlin A the National Health Expenditure Accounts eam National Health

Spending in 2013 Growth Slows Remains in Step With Overall Economy Health Affairs January 2015httpcontenthealthaffairsorgcontent341150full

31 PricewaterhouseCoopers Health Research Institute Medical Cost rend Behind the Numbers 2015 June 2014httppwchealthcomcgi-localhregistercgiregpwc-hri-medical-cost-trend-2015pdf





33 Massachusetts Health Policy Commission 2013 Cost rends Report January 2015httpwwwmassgovanfdocshpc2013-cost-trends-report-finalpdf

34 Haviland A McDevitt R Marguis MS Sood N Buntin M Skin in the Game How Consumer-Directed PlansAffect the Cost and Use of Health Care Santa Monica CA RAND Corporation 2012httpwwwrandorgpubsresearch_briefsRB9672



37 Gould E Increased Health Care Cost Sharing Works As Intended It burdens patients who need care the most Economic Policy Institute May 2013httpwwwepiorgpublicationbp358-increased-health-care-cost-sharing-works

38 Blue Cross Blue Shield Association and Blue Health Intelligence A Study of Cost Variations for Knee and HipReplacement Surgeries in the US January 2015httpwwwbcbscomhealthofamericaBCBS_BHI_Report-Jan-_21_Finalpdf

39 Anthony B Haller S Mass Hospitals Weak on Price ransparency June 2015httppioneerinstituteorghealthcaresurvey-price-information-difficult-to-obtain-from-massachusetts-hospitals

40 For more recommendations to improve health systems flexibility and generate more options for consumers seePioneerrsquos Bakerrsquos Dozen reporthttppioneerinstituteorgnewsbakers-dozen-a-common-sense-healthcare-agenda-for-the-next-governor

41 Tese projections for civilian households are based on 2013 data for premium contributions to family plans themost recent year for which data is available through MEPS Te most recent data for private sector households isfrom 2014






185 Devonshire Street Suite 1101 | Boston MA 02110 | 6177232277 wwwpioneerinstituteorg | FacebookcomPioneerInstitute | wittercomPioneerBoston

Copyright copy 2015 Pioneer Institute for Public Policy Research All rights reserved




P983145983151983150983141983141983154rsquo983155 M983145983155983155983145983151983150Pioneer Institute is an independent non-partisan privately funded research organization that seeks

to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous

data-driven public policy solutions based on free market principles individual liberty and responsibility

and the ideal of effective limited and accountable government

Pioneer Institute is a tax-exempt 501(c)3 organization funded through the donations of individuals foundations and businessescommitted to the principles Pioneer espouses o ensure its independence Pioneer does not accept government grants

Tis paper is a the Center for Health Care Solutions which seeks to refocus the

Massachusetts conversation about health care costs away from government-imposed

interventions toward market-based reforms Current initiatives include driving public

discourse on Medicaid presenting a strong consumer perspective as the state considers

a dramatic overhaul of the health care payment process and supporting thoughtful

tort reforms

Te Center for Better Government seeks limited accountable government by promoting

competitive delivery of public services elimination of unnecessary regulation and a focus

on core government functions Current initiatives promote reform of how the state builds

manages repairs and finances its transportation assets as well as public employee benefit

reform

Te Center for School Reform seeks to increase the education options available to parentsand students drive system-wide reform and ensure accountability in public education Te

Centerrsquos work builds on Pioneerrsquos legacy as a recognized leader in the charter public school

movement and as a champion of greater academic rigor in Massachusettsrsquo elementary

and secondary schools Current initiatives promote choice and competition school-based

management and enhanced academic performance in public schools

Te Center for Economic Opportunity seeks to keep Massachusetts competitive by

promoting a healthy business climate transparent regulation small business creation in

urban areas and sound environmental and development policy Current initiatives promote

market reforms to increase the supply of affordable housing reduce the cost of doing

business and revitalize urban areas




Executive Summary 5

Background 5

Methodology 7

Findings 9

Discussion 12

Conclusion 14

Appendix 17


About the Author 19

Endnotes 20

ABLE OF CONENS





















ten years from now


B983137983139983147983143983154983151983157983150983140

H983141983137983148983156983144 C983137983154983141 A983150 I983150983139983154983141983137983155983145983150983143 B983157983154983140983141983150983151983150 F983137983149983145983148983145983141983155





















W983144983137983156 983145983155 983156983144983141 S983156983137983156983141 983151983142 983156983144983141 US H983141983137983148983156983144C983137983154983141 S983161983155983156983141983149 T983151983140983137983161983103



















































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes






























































Executive Summary 5

Background 5

Methodology 7

Findings 9

Discussion 12

Conclusion 14

Appendix 17


About the Author 19

Endnotes 20

ABLE OF CONENS





















ten years from now


B983137983139983147983143983154983151983157983150983140

H983141983137983148983156983144 C983137983154983141 A983150 I983150983139983154983141983137983155983145983150983143 B983157983154983140983141983150983151983150 F983137983149983145983148983145983141983155





















W983144983137983156 983145983155 983156983144983141 S983156983137983156983141 983151983142 983156983144983141 US H983141983137983148983156983144C983137983154983141 S983161983155983156983141983149 T983151983140983137983161983103



















































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes















































































ten years from now


B983137983139983147983143983154983151983157983150983140

H983141983137983148983156983144 C983137983154983141 A983150 I983150983139983154983141983137983155983145983150983143 B983157983154983140983141983150983151983150 F983137983149983145983148983145983141983155





















W983144983137983156 983145983155 983156983144983141 S983156983137983156983141 983151983142 983156983144983141 US H983141983137983148983156983144C983137983154983141 S983161983155983156983141983149 T983151983140983137983161983103



















































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes












































































ten years from now


B983137983139983147983143983154983151983157983150983140

H983141983137983148983156983144 C983137983154983141 A983150 I983150983139983154983141983137983155983145983150983143 B983157983154983140983141983150983151983150 F983137983149983145983148983145983141983155





















W983144983137983156 983145983155 983156983144983141 S983156983137983156983141 983151983142 983156983144983141 US H983141983137983148983156983144C983137983154983141 S983161983155983156983141983149 T983151983140983137983161983103



















































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes












































































W983144983137983156 983145983155 983156983144983141 S983156983137983156983141 983151983142 983156983144983141 US H983141983137983148983156983144C983137983154983141 S983161983155983156983141983149 T983151983140983137983161983103



















































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes










































































































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes

























































































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes





































































F983145983150983140983145983150983143983155



T983144983141 S983149983145983156983144983155








Year 2014 2025 2035




Year 2014 2025 2035















household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes






































































household income

T983144983141 M983145983148983148983141983154983155







Year 2014 2025 2035









Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes

































































Year 2014 2025 2035








Year 2014 2025 2035






D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes






























































D983145983155983139983157983155983155983145983151983150





W983144983145983139983144 S983139983141983150983137983154983145983151 983145983155 M983151983154983141 L983145983147983141983148983161983103





Year 2014 2025 2035



















F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes








































































F983151983139983157983155983145983150983143 983151983150 983156983144983141 B983137983161 S983156983137983156983141











C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes






























































C983151983150983139983148983157983155983145983151983150

R983141983139983151983149983149983141983150983140983137983156983145983151983150983155
















































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes




























































































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes











































































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes






























































A983152983152983141983150983140983145983160







T983141983154983149983155 983137983150983140 D983141983142983145983150983145983156983145983151983150983155


























with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes











































































with no employees











About Pioneer



Recent Publications













Brief June 2015





Endnotes

































































About Pioneer



Recent Publications













Brief June 2015





Endnotes






























































Endnotes
































































































































Documents

Family HC Costs WP