Health Care Spending Accounts For One-Quarter Of Household Expenditures In Oregon, Study Says

By Lynne Terry, Oregon Capital Chronicle

April 28, 2022

Health care costs account for nearly one-quarter of household spending in Oregon, according to a new report from the Oregon Health Authority.

The report, published this week, said that at 23% of expenses, health care is the single biggest household expenditure for Oregonians, followed by housing, utilities and fuel.

Insurance premiums and deductibles, which consumers have to pay before their plans kick in, account for part of the cost. Premiums are so high in Oregon that for households on company plans they are approaching the average cost of a new compact car – $21,000.

The report is the first of its kind in Oregon and is part of the state’s efforts to curb skyrocketing health care costs. Such expenses affect hundreds of thousands of Oregonians, causing households to skimp on other expenses and drain savings, with some going into debt and bankruptcy.

The state is also publishing price hikes for new medications to publicly shame companies that charge six- and even seven-figure sums for new products. Despite opposition from industry, the Legislature put the health authority in charge of overseeing company mergers to ensure they don’t drive up costs.

The report found that health care costs tax the economy, burden poorer communities, widen the equity gap and jeopardize personal finances.

Among the data:

• Premiums grew 40% from 2013 through 2019 to about $3,600 a year.
• Oregonians spent more than the national average on health care over those same years.
• 10% of Oregonians exhausted their savings in 2019 to pay for health care.
• 60% of bankruptcies in 2019 included medical debt.
• Native Hawaiian and Pacific Islander Oregonians were three times more likely to report using up their savings on medical bills as white Oregonians.

“This report fleshes out with data a troubling picture of the impacts of rising health care costs on Oregon families,” according to a statement from Jeremy Vandehey, director of the Health Policy and Analytics Division of the Oregon Health Authority. “While we’ve known for a long while that the rate of cost growth was unsustainable, Covid showed us in stark relief how important access to affordable care was to Oregon families. High costs not only cause poor health outcomes, but they also do real financial harm to people in Oregon.”

The report foresees no relief.

“Health care costs are projected to continue growing in Oregon and nationally,” it said.

To stem skyrocketing health care costs, the state is aiming to keep annual rate increases to 3.4%. Other states – Delaware, Rhode Island, Connecticut, Washington and New Jersey – have similar programs, following Massachusetts, which led the way in 2012.

The challenge they face in curbing health care costs is ensuring quality care continues.

“We must contain health care cost growth in ways that do not impact people’s health, the quality of health services or exacerbate health inequities,” Vandehey wrote.

The state will continue to monitor health care costs, producing an annual report. In 2026, insurers and providers will be penalized if they don’t follow the target rate.

Oregon Capital Chronicle, an independent, nonprofit news organization, provides detailed, balanced and clear reporting on Oregon state government, politics and policies. The Oregon Capital Chronicle is part of States Newsroom, a national 501(c)(3) nonprofit supported by grants and a coalition of donors and readers.