Health Spending for Low, Middle, and High-Income Americans, 1963-2012

Abstract

U.S. medical spending growth has slowed since 2004, coincident with rising co-payments and deductibles, which might particularly impact lower-income persons. We analyzed 22 national surveys between 1963 and 2012 to assess trends in health expenditures by and on behalf of persons in each income quintile. Before the 1965 passage of Medicare and Medicaid, the poorest quintile had the lowest expenditures, despite their worse health. By 1977 their expenditures exceeded those for other Americans (although after adjusting for age and health status the income-based gap never fully reversed). This pattern persisted until 2004. Thereafter, expenditures fell 3.7% for the poorest quintile, while rising 12.5% for the middle-three quintiles and 19.7% for the wealthiest, who had the highest expenditures in 2012. The post-2004 divergence of expenditure trends for the rich, middle-class and poor occurred only among the non-elderly. We conclude that the slowdown in health expenditure growth in the non-elderly has been driven primarily by lower spending among the poorest segment of the US population.