NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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How Do Economic Shocks Affect Family Health Care Spending Burdens?

Irina B. Grafova, Alan C. Monheit, Rizie Kumar

NBER Working Paper No. 26443
Issued in November 2019
NBER Program(s):Health Economics

We use data from the Medical Expenditure Panel Survey (MEPS) for the years 2004 - 2012 to examine the impact of economic shocks on the family’s out-of-pocket health care spending burden. We define this burden as the share of family income devoted to out-of-pocket health care spending. In contrast to static, cross-sectional analyses, our study examines how the within-family change in spending burden over the two-year MEPS observation period responds to losses in family income, insurance, and employment. We also consider the impact of such losses on single-mother and two-parent families. To do so, we apply fractional response and health expenditure models using the correlated random effects (CRE) method to control for time-invariant, unobserved heterogeneity across family units. We find evidence that the change in the out-of-pocket spending burden is sensitive to income shocks, and that income changes rather than changes in health spending per se appears to drive changes in the out-of-pocket burden.

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Document Object Identifier (DOI): 10.3386/w26443

 
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