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Health Care Costs and Financing

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Out-of-pocket health care expenses pose a significant financial burden for low-income families with children

Socioeconomic disparities exist in the financial burden of out-of-pocket (OOP) health care expenditures for families with children. In a new study supported by the Agency for Healthcare Research and Quality (HS11662), investigators analyzed data from the 2001 Medical Expenditure Panel Survey on health care use and expenditures. They examined families' financial burdens (ratio of OOP family health care expenditures per $1,000 of family income) for 4,531 families with children under 18 years. OOP expenses included direct payments, deductibles, co-insurance, copayments, and premiums.

Families in the lowest income group paid a disproportionately larger share of family income for total OOP expenditures than all other income groups. More than a quarter of families (28 percent) living below the Federal poverty level (FPL) had total OOP health care expenditures that exceeded 10 percent of family income, compared to 6.3 percent of families with incomes great than 400 percent FPL. Families with incomes less than 100 percent of the FPL spent an average of $119.66 OOP per $1,000 of family income, while families with incomes 100 to 199 percent of the FPL spent $66.30 OOP per $1,000, and families with incomes greater than 400 percent FPL spent $37.75 OOP per $1,000.

For low-income families, full-year public coverage provided significantly greater protection from financial burden than full-year private coverage. However, full-year public coverage was not associated with reduced financial burden compared with being uninsured all year. Despite similar financial burden, families with public insurance had more physician visits and less need to forego needed care to pay for food and housing than the uninsured group.

See "Out-of-pocket financial burden for low-income families with children: Socioeconomic disparities and effects of insurance," by Alison A. Galbraith, M.D., M.P.H., Sabrina T. Wong, R.N., Ph.D., Sue E. Kim, Ph.D., M.P.H., and Paul W. Newacheck, Dr.P.H., in the June 2005 Health Services Research, which is available online at

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