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Out‐of‐Pocket Medical Expenditures in the United States: Evidence from the Health and Retirement Study
Author(s) -
Fahle Sean,
McGarry Kathleen,
Skinner Jonathan
Publication year - 2016
Publication title -
fiscal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.63
H-Index - 40
eISSN - 1475-5890
pISSN - 0143-5671
DOI - 10.1111/j.1475-5890.2016.12126
Subject(s) - health spending , health and retirement study , demographic economics , context (archaeology) , economics , distribution (mathematics) , demography , health insurance , medicine , health care , geography , economic growth , gerontology , mathematical analysis , mathematics , archaeology , sociology
We use data from the Health and Retirement Study (HRS) to document the distribution of out‐of‐pocket medical spending among individuals aged 55 and over in the US. The HRS data permit us to examine out‐of‐pocket spending close to the end of life and to analyse the components of spending in more detail than has been done in previous studies. We find that spending risk rises sharply at older ages and near the end of life. While the median individual spent $6,328 out‐of‐pocket in the last year of life, 5 per cent were reported to have spent over $62,040. Our results also indicate that out‐of‐pocket spending is highly concentrated, with the top 10 per cent of spenders accounting for 42 per cent of all spending, and persistent, even over periods spanning many years. Finally, while certain categories of spending are very responsive to income and wealth, we do not find overall spending to be highly concentrated along these dimensions. Viewed within the international context, our results suggest that the fraction of households facing very high out‐of‐pocket spending is substantially greater in the US than in other developed countries.