Lower-Income Families Pay A Higher Share Of Income Toward National Health Care Spending Than Higher-Income Families Do

• Published in: Health Affairs 2011-09, Vol.30 (9), p.1637-1646
• Main Authors: Ketsche, Patricia, Adams, E. Kathleen, Wallace, Sally, Kannan, Viji Diane, Kannan, Harini
• Format: Article
• Language: English
• Subjects: Beneficiaries; Capital assets; Childrens health insurance programs; Consumer spending; Consumers; Consumption; Deficit financing; Equity; Expenditures; Families & family life; Family income; Health care; Health care expenditures; Health care policy; Health insurance; Income; Income taxes; Low income groups; Medicaid; Medicare; Payments; Population; Sales taxes; Studies; Subsidies; Tax reform; Tax revenues
• ISSN: 0278-2715; 1544-5208
• DOI: 10.1377/hlthaff.2010.0712

All health care spending from public and private sources, such as governments and businesses, is ultimately paid by individuals and families. We calculated the burden of US health care spending on families as a percentage of income and found that at the national level, lower-income families pay a larger share of their incomes toward health care than do higher-income families. Specifically, we found that payments made privately, such as those for health insurance or out-of-pocket spending for care, and publicly, through taxes and tax expenditures, consumed more than 20 percent of family income for families in the lowest-income quintile but no more than 16 percent for families in any other income quintile. Our analysis provides a framework for considering the equity of various initiatives under health reform. Although many effects remain to be seen, we find that, overall, the Affordable Care Act should reduce inequities in the burden of paying for national health care spending. [PUBLICATION ABSTRACT]