Rising Out-of-Pocket Spending for Medical Care: A Growing Strain on Family Budgets

Abstract

Since the late 1990s, accelerated growth in health care spending has translated into increased burdens on family budgets. In 2001–02, an average of 13 million families per year had direct out-of-pocket (OOP) costs equal to or exceeding 10 percent of family income. When premium costs are added into the equation, even more families are devoting a substantial share of resources to health care expenses. Using data from the Medical Expenditure Panel Survey to examine trends in family OOP spending between 1996–97 and 2001–02, this report examines the components of OOP spending and characteristics of families with high OOP costs, including income level and insurance coverage. Families struggling with high OOP expenses are more likely than other families to report difficulties in obtaining needed care, and often have trouble paying their bills—increasing the possibility that they may face debt or bankruptcy or drop coverage altogether. Support for this research was provided by The Commonwealth Fund. The views presented here are those of the authors and not necessarily those of The Commonwealth Fund or its directors, officers, or staff. This and other Fund publications are online at www.cmwf.org. To learn more about new publications when they become available, visit the Fund’s Web site and register to receive e-mail alerts. Commonwealth Fund pub. no. 887.