Lower-Income Families Pay a Higher Share of Income Toward National Health Care Spending Than Higher-Income Families Do

All health care spending from public and private sources, such as governments and businesses, is ultimately paid by individuals and families.

Researchers calculated the burden of U.S. health care spending on families as a percentage of income and found that at the national level, lower-income families pay a larger share of their incomes toward health care than do higher-income families. Specifically, we found that payments made privately, such as those for health insurance or out-of-pocket spending for care, and publicly, through taxes and tax expenditures, consumed more than 20 percent of family income for families in the lowest-income quintile but no more than 16 percent for families in any other income quintile. Our analysis provides a framework for considering the equity of various initiatives under health reform.

Although many effects remain to be seen, we find that, overall, the Affordable Care Act should reduce inequities in the burden of paying for national health care spending.