This article examines whether affordability thresholds of financial strain due to medical bills change over time. The authors look at the relationship between out-of-pocket spending on medical expenses and self-reported financial strain from medical costs.

The increasing cost of health care is a central issue in health policy and out-of-pocket spending for families has grown faster than incomes in the past decade. The authors of this study analyzed data from the 2007 Health Tracking Household Survey and the Community Tracking Study Household Survey, two telephone-based surveys with similar questionnaires. They conducted a multivariate analysis of 27,000 individuals from the 2003 survey and 9,600 individuals from the 2007 survey. All respondents were under age 65 and had employer-based insurance.

Key Findings:

• Financial stress due to medical bills increased from 12.5 percent in 2003 to 15.4 percent in 2007.
• For middle- and higher-income individuals, increased financial stress was linked to higher spending on out-of-pocket medical costs.
• For lower-income individuals, higher financial stress due to medical bills was reported despite a small increase in out-of-pocket costs relative to income. Financial stress was not linked to changes in income, health status or demographics.

These results suggest that the threshold for affordability of health costs fell for lower-income families between 2003 and 2007. This study did not identify reasons for this decrease in the affordability threshold, but policy-makers should be aware of this shift as they create policy on health care costs.