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January 8, 2008Higher Costs and Stagnant Incomes Increase Financial Burden of Health Care |
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From The Commonwealth Fund: Rising out-of-pocket expenses and stagnant incomes increased the financial burden of health care for more Americans between 2001 and 2004, especially for the privately insured, according to a national study supported in part by the Commonwealth Fund and published in the January/February edition of Health Affairs. More than one in six Americans---or 17.7 percent of the nonelderly population---lived in families spending more than 10 percent of after-tax income on health care in 2004, up from 15.9 percent in 2001. Conducted by researchers at the Center for Studying Health System Change (HSC) and the Agency for Healthcare Research and Quality (AHRQ), the study defined people living in families spending more than 10 percent of after-tax income on health care---including health insurance premium payments and direct spending on services---as having a high financial burden. The increase in financial burden was driven entirely by people with private insurance, most of whom had employer-sponsored coverage: one in six people (17%), or 29 million people, with employer-sponsored insurance faced high burdens in 2004, up from one in seven people (14.7%) in 2001, the study found. For people with employer coverage, out-of-pocket spending for premiums and services rose $553 to $3,211, a 21 percent increase between 2001 and 2004 after accounting for inflation. Given projections that overall private health insurance costs and out-of-pocket spending will rise 6 percent to 7 percent annually through 2016, the authors conclude that high financial burdens for health care are likely to continue to affect more Americans since growth in incomes is unlikely to keep pace with increases in the cost of care.
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