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For More Americans, Health Care Costs At Least 10 Percent of Family Income

News Release
March 25, 2010

Alwyn Cassil (202) 264-3484 or

WASHINGTON, DC—Almost one in five Americans—or 19.1 percent of the nonelderly population—lived in families spending more than 10 percent of before-tax income on health care in 2006, up from one in seven Americans (14.4%) in 2001, according to a Center for Studying Health System Change (HSC) study published online today by Health Affairs.

Supported by the Commonwealth Fund, the study shows that a growing number of Americans between 2001 and 2006 faced a high financial burden from health care expenses, defined as spending more than 10 percent of their before-tax income on insurance premiums and medical care. In addition, almost 30 percent of the U.S. population either incurred these high costs or were uninsured, according to the article, titled "The Growing Financial Burden Of Health Care: National And State Trends 2001-2006."

In the study, HSC Senior Fellow Peter J. Cunningham, Ph.D., analyzed data from the Medical Expenditure Panel Survey (MEPS) for 2001 through 2006. Sample sizes of about 28,000 people aged 65 and younger are included for each of the survey years. Overall, the study found that throughout this period the percentage of Americans with high financial burden increased, on average, by about one percentage point per year.

In addition, the study found substantial variation in high financial burden among insured persons across states, ranging from a low of 12.4 percent in California to a high of 26.4 percent in Alabama. Also, middle-and higher-income people with private insurance experienced the largest increases in financial burden. Since the data in this study predated the recent recession, the author postulated that the economic factors of the last two years are likely to have both increased the number of people lacking medical insurance and decreased access to and affordability of private insurance coverage.

"To stop and reverse the ongoing increase in the number of families with high health care cost burden," the article concluded, "strong economic growth must be accompanied by both increases in family incomes—which have been rare during this decade—and more moderate increases in health care costs."

The just-passed health reform legislation, in the author’s opinion, "has the potential to reduce the state variation in high financial burden among the uninsured population." This is significant, because "states with both high uninsurance rates and high financial burdens among the insured should be a concern for both state and national policy makers, as prior research has shown that high uninsurance rates in an area can have detrimental spillover effects."

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded in part by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research.




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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.