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The effects of household medical expenditures on income inequality in the United States

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  • Christopher, A.S.
  • Himmelstein, D.U.
  • Woolhandler, S.
  • McCormick, D.

Abstract

Objectives. To assess the effect of households’ outlays for medical expenditures on income inequality and changes since the implementation of the Affordable Care Act (ACA). Methods. We analyzed data from the US Current Population Surveys for calendar years 2010 through 2014. We calculated the Gini index of income inequality before and after subtracting households’ medical outlays (including insurance premiums and out-of-pocket costs) from income, the financial burden of medical outlays for each income decile, and the number of individuals pushed below poverty by medical outlays. Results. In 2014, the Gini index was 47.84, which rose to 49.21 after medical outlays were subtracted, indicating that medical outlays effectively redistributed about 1.37% of total income from poorer to richer individuals, a slightly smaller redistribution compared with the years before the ACA. Medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty. Conclusions. The way we finance medical care exacerbates income inequality and impoverishes millions of Americans. This regressive financing pattern improved minimally in the wake of the ACA.

Suggested Citation

  • Christopher, A.S. & Himmelstein, D.U. & Woolhandler, S. & McCormick, D., 2018. "The effects of household medical expenditures on income inequality in the United States," American Journal of Public Health, American Public Health Association, vol. 108(3), pages 351-354.
    • Handle: RePEc:aph:ajpbhl:10.2105/ajph.2017.304213_0
    DOI: 10.2105/AJPH.2017.304213
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    Cited by:

    1. Ruwan Jayathilaka & Sheron Joachim & Venuri Mallikarachchi & Nishali Perera & Dhanushika Ranawaka, 2020. "Chronic diseases: An added burden to income and expenses of chronically-ill people in Sri Lanka," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-25, October.
    2. Ruwan Jayathilaka & Sheron Joachim & Venuri Mallikarachchi & Nishali Perera & Dhanushika Ranawaka, 2020. "Do chronic illnesses and poverty go hand in hand?," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-19, October.
    3. Acuna, Jorge A. & Zayas-Castro, Jose L. & Feijoo, Felipe, 2022. "A bilevel Nash-in-Nash model for hospital mergers: A key to affordable care," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    4. Jaqueson K Galimberti & Stefan Pichler & Regina Pleninger, 2023. "Measuring Inequality Using Geospatial Data," The World Bank Economic Review, World Bank, vol. 37(4), pages 549-569.
    5. Shubin Wang & Junsheng Ha & Hakan Kalkavan & Serhat Yüksel & Hasan Dinçer, 2020. "IT2-Based Hybrid Approach for Sustainable Economic Equality: A Case of E7 Economies," SAGE Open, , vol. 10(2), pages 21582440209, May.

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