Burden of health care payments greatest among households with lowest incomes

Burden of health care payments greatest among households with lowest incomes

Higher income American households pay the most to finance the nation's health care system, but the burden of payments as a share of income is greatest among households with the lowest incomes, according to a new RAND Corporation study. Households in the bottom fifth of income groups pay an average of 33.9% of their income toward health care, while families in the highest income group pay 16% of their income toward health care. The analysis finds that households in the middle three income tiers pay between 19.8% and 23.2% of their income toward health care. The analysis considered all payments made by households to support health care, including taxes and employer contributions. The study is published online by the journal Health Services Research . Our findings suggest that health care payments in the U.S. are even more regressive than suggested by earlier research. As national discussions continue about health reform and health equity, it's important to understand how the current health care system distributes costs and payments." Katherine G. Carman, lead author of the study and a senior economist at RAND In 2015, health care spending accounted for nearly 18 percent of the U.S.'s gross domestic product, a measure of the total value of goods produced and services provided by the nation. Ultimately all health care costs are paid by households, either in obvious ways such as through insurance premiums or out-of-pocket costs, in addition to less-visible ways such as employer-paid premiums and taxes. RAND researchers analyzed a variety of sources of information to examine the burden that different families face to pay for health care, as well as the relationship between who pays for care and who receives care. Researchers combined data from multiple sources collected in 2015, including the Survey of Income and Program Participation, the Medical Expenditure Panel Survey, the Kaiser Family Foundation/Health Research Education Trust Employer Health Benefits Survey, the American Community Survey and the National Health Expenditure Accounts. Previous research has examined the distribution of health care financing, but the new RAND study considers payments made to finance health care, the dollar value of benefits received, and the impact on different groups by age, source of insurance and size of income. The RAND study also is the first to consider the burden of health costs among people who are in nursing homes and other institutions, a calculation that led to higher estimates of health spending. The burden is particularly large on low-income people who need long-term care because in order to qualify for public benefits they must first spend most of their savings. Related Stories



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