US Health Financing Became Less Regressive

Biologics Are Not Natural Monopolies

Studies examining health care spending in the US have found regressive patterns of incidence, with total health-related spending as a share of income being higher for lower-income households than for higher-income households. A new study, being released ahead of print by Health Affairs, looks at how the distribution of household spending across income groups changed between 2005 and 2016. The authors found that at the beginning of that period, households in the bottom 20 percent of income paid 26.8 percent of their income, with the percentage declining for the top 1 percent of income to 13.8 percent. By contrast, in 2016, the incidence of health spending was similar across incomes, with the bottom 20 percent paying 22.6 percent of their income, compared to 21.4 percent for the top 1 percent (see the exhibit below). For their study the authors combined information from nationally representative data sources, including data from the Agency for Healthcare Research and Quality, the Centers for Medicare and Medicaid Services, the Congressional Budget Office, and the National Bureau of Economic Research.


“Our analysis offers important insights into a substantial shift toward greater progressivity that occurred during a period of substantial macroeconomic, tax, and health policy upheaval,” the authors conclude. “Health care finance became more progressive in part due to recent expansions in Medicaid and federally financed Marketplaces, as well as earlier changes in Medicare Part D and changes to the federal tax code.”

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