The financial burden of health care—the ratio of total out-of-pocket spending for health care services and premiums to total family income—continues to increase nationally. As a result of this trend, more people have been exposed to high costs and lack essential services. This study examines trends nationally and among selected states between 2001 and 2006.
The results show considerable state-to-state variation associated mainly with differences in family income and, to a lesser extent, out-of-pocket spending for insurance premiums. Nationally, middle- and higher-income people with private insurance experienced the largest increases in financial burden. Moreover, almost 30 percent of the U.S. population either had a high financial burden of health costs or were uninsured. These facts underscore that escalating health care costs affect all socioeconomic strata, not just the poor.
- The percentage of people with a high financial burden increased from 14.4 percent in 2001 to 19.1 percent—nearly one of five Americans—in 2006. The increase in financial burden between 2004 and 2006 (16.4%) occurred at a time when the economy was expanding.
- Spending on premiums and services increased more dramatically among those with private nongroup insurance. This group saw a 17 percent increase in total out-of-pocket spending between 2004 and 2006, compared with 9 percent for those with employer-sponsored coverage.
- Financial burden among the privately insured increased among most income groups between 2004 and 2006. However, the relative increase in high burden has been much greater for middle- and higher-income privately insured people, compared with lower-income people.
- Of the total nonelderly U.S. population during the 2004–06 period, 15.7 percent were insured with high out-of-pocket expenses, and 14.2 percent were uninsured for the entire year. Thus, almost 30 percent of the U.S. population either had high financial burdens or were uninsured.
- There is substantial variation in the levels of financial burden across states. The proportion of insured people with high financial burdens ranged from a high of 26.4 percent in Alabama to a low of 12.4 percent in California.
- States with high financial burden among the privately insured tend to have lower family incomes, on average, and higher out-of-pocket spending on premiums.
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[Source: Excerpted from the Commonwealth Fund on March 29, 2010. Article author: P. Cunningham, in Health Affairs Web First, published March 25, 2010]