The Burden of Out-of-Pocket Health Spending Among Older Versus Younger Adults: Analysis from the Consumer Expenditure Survey, 1998-2003

UPDATED: An updated version of this analysis is now available online.

Recent policy debate has focused on the issue of rising health care costs and whether it might be possible to control costs by requiring consumers to pay a larger share of their health care costs out of pocket. While most of the policy discussion has focused on people of working age, rising health care costs and the burden of out-of-pocket spending also affects seniors, who generally have higher medical expenses and lower incomes than younger adults.

This analysis examines the relative burdens of out-of-pocket spending on seniors and younger adults. Using data from the Consumer Expenditures Survey from 1998 to 2003, it finds that seniors consistently spent a larger share of their income out of pocket on health care than younger people. Given the persistent differences between young and old, it suggests that even with Medicare’s prescription drug benefit, significantly narrowing the wide gap between seniors and younger adults in their out-of-pocket spending burdens is unlikely.

The paper presents analysis by Katherine A. Desmond, M.S., and Thomas Rice, Ph.D., of the University of California, Los Angeles; and Juliette Cubanski, Ph.D. and Patricia Neuman, Sc.D., of the Kaiser Family Foundation.

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