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Out-of-Pocket Healthcare Spending Grew 8.5 Percent in 2017, According to New Data from JPMorgan Chase Institute

Low-income families saw their burden increase nearly twice as much as average families

October 24, 2018, (Washington, D.C.) – Today the JPMorgan Chase Institute released new research showing that out-of-pocket healthcare spending increased 8.5 percent between 2016 and 2017, the fastest growth over the last three years. The report and downloadable dataset are the first publicly available data source with 2017 estimates on out-of-pocket healthcare trends and covers a three-year period from 2014-2017. They show double digit growth (13.5 percent) in healthcare spending in California and also an uptick in the financial burden of healthcare spending as a fraction of take-home income across the nation.

The report, On the Rise: Out-of-Pocket Healthcare Spending in 2017, shows that low-income families had the highest healthcare spending burden in 2017, which grew nearly twice as much as the average family in 2017. While the average healthcare spending burden increased by 0.10 percentage point from 1.6 percent in 2016 to 1.7 percent in 2017, low-income families’ out-of-pocket healthcare spending burden grew by 0.18 percentage points, nearly twice as much, from 2.6 percent in 2016 to 2.8 percent in 2017.

“For many American families, out-of-pocket healthcare spending continues to grow and eat up a larger share of their income,” said Diana Farrell, President and CEO, JPMorgan Chase Institute. “This is concerning because we know that families defer care that requires out-of-pocket spending to moments when they have the most cash, such as when they receive a tax refund. By tracking healthcare expenses over time, we can better understand the role of healthcare spending in the financial lives of America’s families, and especially for those who are most vulnerable to even minor fluctuations in cost or spending burden."

Some of the report’s key takeaways include:

  • Out-of-pocket healthcare spending grew across all states and demographic groups in 2017, increasing 8.5 percent since 2016.
    • In 2017 out-of-pocket healthcare spending grew by 8.5 percent year-over-year, the fastest increase since 2014. Over the last three years, spending increased by an average annual rate of 5.8 percent.
    • Growth in healthcare spending occurred across every state and demographic group and sub-category of healthcare spending, with the exception of drug spending, which declined.
  • Low-income family saw their healthcare spending burden grow nearly 2x as much as the average family.
    • While the average healthcare spending burden increased by 0.10 percentage point from 1.6 percent in 2016 to 1.7 percent in 2017, low-income families’ out-of-pocket healthcare spending burden grew by 0.18 percentage points, nearly twice as much, from 2.6 percent in 2016 to 2.8 percent in 2017.
  • Out-of-pocket healthcare spending continues to be highly concentrated among a small fraction of population. In 2017, 10 percent of people accounted for 52 percent of out-of-pocket spending.
    • In 2017, the top 10 percent of spenders spent on average $3,255, which is five times as much as the average spender and represents 9.5 percent of their take-home income.
    • Out of the 8.5 percent growth we observed at the aggregate level, the top 10 percent of spenders contributed 48 percent of that growth.
  • There is wide variation in out-of-pocket healthcare spending and burden levels and growth rates across states.
    • California showed the fastest growth in spending levels (13.5 percent) from 2016 to 2017, compared to the 23-state average of 8.5 percent.
    • In 2017, families in Utah spent the most on and were the most burdened by out-of-pocket healthcare spending. Healthcare spending burden was highest among low-income families in Utah, about 5.7 percent of those families’ take-home income.
      • Families in Utah spent $864 on average in 2017 compared to the 23-state average of $625, making Utah the highest spending state.
      • Utah also ranked the highest in terms of healthcare spending burden. On average, families in Utah spent 2.8 percent of their take-home income in 2017, compared to the 23-state average of 1.7 percent.

The JPMorgan Chase Institute report is based on the JPMorgan Chase Institute Healthcare Out-of-Pocket Spending Panel (JPMCI HOSP). The data asset was constructed using a sample of 4.7 million de-identified regular Chase customers age 18 to 64 across 23 states between January 2013 and December 2017. The Institute defined out-of-pocket healthcare spending as any observed payments to healthcare providers and drugstores, including co-payments, co-insurance, and other point-of-service medical, dental, or drug costs. Along with the report, the HOSP Geographic Data Visualization Tool allows interested parties to explore out-of-pocket healthcare spending trends at the state and county level as well as for different demographic groups.

Click here to read the full report.


About the JPMorgan Chase Institute
The JPMorgan Chase Institute is a global think tank dedicated to delivering data-rich analyses and expert insights for the public good. Its aim is to help decision makers–policymakers, businesses, and nonprofit leaders–appreciate the scale, granularity, diversity, and interconnectedness of the global economic system and use better facts, timely data, and thoughtful analysis to make smarter decisions to advance global prosperity. Drawing on JPMorgan Chase & Co.’s unique proprietary data, expertise, and market access, the Institute develops analyses and insights on the inner workings of the global economy, frames critical problems, and convenes stakeholders and leading thinkers. For more information visit: JPMorganChaseInstitute.com