Out-of-Pocket Health Spending between Low- and Higher-Income Populations: Who Is at Risk of Having High Expenses and High Burdens?

Objective: We studied the effects of health insurance, health care needs, and demographic and area characteristics on out-of-pocket health care spending for low and higher income insured populations. Materials and Methods: We used the 2002 National Survey of America's Families to analyze out-of-pocket health spending. People were classified into 3 levels of expenses based on their out-of-pocket health care spending and 3 levels of financial burden based on spending as a share of family income. We used a multinomial logit model to estimate the effect of insurance status and other factors on expense and burden levels. Results: Public insurance appears to offer the best financial protection from high out-of-pocket expenses and financial burden for those who are eligible. Families with private nongroup coverage have the highest odds of being in the high-expense and high-burden categories for all incomes. For higher-income families, having a family member in fair or poor health is a significant risk factor for high out-of-pocket expenses and financial burden. Having higher penetration of health maintenance organizations in an area appears to lower the odds of being in the high-burden category for all families. Conclusions: Health insurance may not prevent people from having high health care spending. Low-income people with serious health needs appear to be financially constrained and spend less on health care relative to higher-income people, and the presence of health maintenance organizations may help reduce out-of-pocket health care spending.