Medicare beneficiaries see the largest return on the money they pay for their healthcare, a new study shows.
Meanwhile, people with employer-sponsored plans see the least amount of value for what they pay into the healthcare system, researchers at RAND Corporation found.
The analysts combed five data sources to paint a picture of how health spending impacts different income brackets and different types of coverage. In Medicare, for example, as older people tend to use the most healthcare services, they get the biggest return for what they spend on their care.
People enrolled in Medicaid see the largest value return as a portion of income, according to the study, as they’re typically in the lowest income brackets.
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In the three lowest income groups, households received more care than they paid into the system. In the fourth lowest, it was about even.
By contrast, households in the five highest income brackets paid more into the system than they used in care.
“Understanding how different groups contribute to and benefit from health care spending is difficult for researchers, policymakers and the general public,” said Katherine Carman, lead author of the study and a senior economist at RAND, in a statement.
“This work provides better insight into how the American health care system redistributes contributions and spending across different parts of society,” Carman said.
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Overall, the researchers found that on average including both direct out-of-pocket costs such as premiums and more behind-the-scenes expenses such as taxes, the average person spends $9,373 per year to finance healthcare, or about 18.7% of their income.
Though out-of-pocket may be the most acutely felt by consumers, it accounts for just 9.1% of what’s spent to finance care, the study found.
People in the lowest income brackets are also—perhaps unsurprisingly—paying the largest portion of their income toward healthcare, the study shows. Households in the bottom fifth of income groups spend 33.9% of their income on healthcare, while those in the highest income brackets spend 16% of their income.
In the middle groups, households put between 19.8% and 23.2% of their incomes toward healthcare.
“Our findings suggest that health care payments in the U.S. are even more regressive than suggested by earlier research,” Carman said.
