More people in US dealing with financial burden of health care costs

December 12, 2006

An estimated 50 million people younger than 65 years in the U.S. live in families that spend more than 10 percent of their family income on health care, an increase of more than 10 million people in the past decade, according to a study in the December 13 issue of JAMA.

Health care costs have been rising faster than the rest of the U.S. economy for many years. Out-of-pocket payments for health care services by patients increased from $162 billion in 1997 to $236 billion in 2004, according to background information in the article. Although health care expenditures are consuming a larger share of the U.S. gross domestic product, it is not clear to what extent health care expenditures are also consuming a larger share of family budgets. This information could help policymakers understand the impact of their policies and inform the debate on where to target additional subsidies.

Jessica S. Banthin, Ph.D., and Didem M. Bernard, Ph.D., of the Agency for Healthcare Research and Quality (AHRQ), U.S. Department of Health and Human Services, Rockville, Md., examined the net impact of various trends in costs and coverage and changes in benefits on the percentage of family income devoted to insurance and medical care expenditures among the nonelderly population. The researchers analyzed data from the Medical Expenditure Panel Surveys of 1996 and 2003, which are nationally representative samples of U.S. individuals younger than 65 years, to calculate 2 measures of financial burden as a function of tax-adjusted family income. Sample sizes were 19,022 persons in 1996 and 28,970 persons in 2003. Total burden included all out-of-pocket expenditures for health care services, including premiums. Health care services burden excluded premiums and, when applied to the insured population, was used to identify the underinsured, which was defined as insured persons with health care service burdens in excess of 10 percent of tax-adjusted family income.

"We found that the prevalence of high financial burdens increased across the population as a whole and among several subgroups between 1996 and 2003," the authors write. By 2003, there were 48.8 million individuals (19.2 percent of the population) living in families that spent more than 10 percent of family income on medical care, an increase of 11.7 million persons since 1996. Of these individuals, 18.7 million (7.3 percent of the population) lived in families spending more than 20 percent of family income on medical care in 2003.

In 2003, individuals with higher-than-average risk of incurring high total burdens included poor and low-income individuals and those with nongroup coverage, age 55 to 64 years, living in a non-metropolitan statistical area, in fair or poor health, having any type of limitation, or having a chronic medical condition.

"Our measure of health care service burden can be used to identify the underinsured, i.e., insured persons without adequate financial protection from high out-of-pocket costs. By this definition, we estimate that 17.1 million insured persons younger than 65 years were underinsured in 2003, including 9.3 million persons with private employment-related insurance, 1.3 million persons with private nongroup policies, and 6.6 million persons with public coverage," they write.
(JAMA. 2006;296:2712-2719. Available pre-embargo to the media at

Editor's Note: This study was supported by the AHRQ, as employer of Drs. Banthin and Bernard. Please see the article for additional information, including other authors, author contributions and affiliations, financial disclosures, funding and support, etc.

For more information, contact JAMA/Archives Media Relations at 312/464-JAMA or e-mail

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