2024 Examination of Health Care Cost Trends

The Haves Have More: The Report shows the unaffordability of health care for many families. An underlying Reverse Robin Hood effect makes it keep getting worse.

The Massachusetts Attorney General’s Office (AGO) has released its 2024 Cost Trends Report, 2024 Examination of Health Care Cost Trends, highlighting the growing unaffordability of healthcare for many families. Despite the Affordable Care Act’s success in expanding coverage—such as eliminating exclusions for preexisting conditions, extending coverage for children up to age 26, and expanding Medicaid in 40 states, the cost burden remains a critical issue.

The report focused on three areas:

1. The financial strain of health expenses on families, including out-of-pocket costs and premium contributions.
2. The burden of patient medical debt.
3. The impact of patient debt on hospitals, particularly those serving low-income communities.

A significant takeaway is the disproportionate financial burden on low-income families. Despite having similar out-of-pocket expenses as wealthier families, these costs represent a greater share of their income, averaging 13%. For families with significant health needs, this burden is even heavier.

Behind these findings is a pernicious effect. Patients enrolled in employer-based insurance pay the same premium, regardless of whether they are rich or poor. But wealthier patients typically access more and higher-cost services than their poorer colleagues. This means that lower-income enrollees actually subsidize wealthier ones—the equivalent of a regressive tax and the exact opposite of what Robin Hood would have done.

The disparity extends to hospitals as well. Facilities in wealthy communities (the “Haves”) benefit from higher commercial insurance rates, fewer Medicaid patients, and small amounts of unpaid patient debt. Meanwhile, safety net hospitals and others in lower-income communities (the “Have Nots”) have lower commercial prices, many Medicaid patients, and many unpaid patient bills. All this combines with an unfortunate reality: poorer patients struggle with medical debt even as they subsidize the care of the wealthy, and the hospitals dedicated to serving those lower-income communities disproportionately suffer from low payment rates, which are further reduced by their patients’ inability to pay their out-of-pocket shares. Those hospitals are often in considerable financial trouble due to the effects of the system, which are way beyond their control.

Ultimately, the system exacerbates inequities: poorer patients not only struggle with medical debt but also inadvertently subsidize the care of wealthier individuals. Meanwhile, hospitals serving under-resourced communities are pushed into financial distress, trapped in a cycle beyond their control.