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Proportion Of Those With High Medical Costs Unchanged During Recent Recession

Chris Fleming

October 25, 2012
Costs and Spending,Drugs and Medical Technology,Elsewhere@ Health Affairs,Insurance and Coverage

During a recession one would expect the percentage of people with high medical costs—those spending 10 percent or more of annual family income—to increase. But a Health Affairs Web First study [1] released yesterday finds that during the 2007–09 recession, the percentage of Americans under age sixty-five with high medical cost burdens was mostly unchanged: 18.8 percent in 2009, compared to 19.2 percent in 2006.

Peter Cunningham of the Center for Studying Health System Change reports that the percentage remained constant because lowered family income was offset by decreased out-of-pocket spending on health services. This study updates Cunningham’s previous Health Affairs study [2] on the same subject.

Cunningham analyzed data from the Medical Expenditure Panel Surveys for 2001 and 2006–09. He found that average out-of-pocket spending on prescription drugs decreased from $258 per person in 2006 to $162 in 2009, the savings due largely to the wider availability of generic drugs. As a result, families spent a smaller share of their health care bill out of pocket in 2009 compared to earlier years, although declining incomes consumed most of these savings.

For those with employer-sponsored private insurance, the average family premium remained virtually unchanged: $1,832 in 2006 and $1,844 in 2009. Looking back at trends in medical costs, Cunningham concludes that “health care became much less affordable to families during the past decade overall…. Future trends in the affordability of health care to families will depend on trends in both overall health care costs and family incomes, both of which influence the demand for medical care.”

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