How Do Economic Shocks Affect Family Health Care Spending Burdens?
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.
This research was funded by a grant from the Agency for Healthcare Research and Quality (AHRQ R01HS024053). We thank Samuel Zuvekas and Steven Hill of AHRQ for their expert advice on the use of MEPS data and development of longitudinal family weights. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Irina B. Grafova & Alan C. Monheit & Rizie Kumar, 2020. "How Do Economic Shocks Affect Family Health Care Spending Burdens?," Journal of Family and Economic Issues, vol 41(3), pages 442-457.