The Greatest Healthcare Burden Falls on Those Who Make the Least

We’re all paying a pretty penny for healthcare — in fact, prices are higher than they’ve been in 32 years and are rising faster than wages.

But who in America is shouldering the biggest burden?

See for yourself.

The Spending Breakdown

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The table is broken down into average incomes of Americans when split into five groups — from the lowest 20 percent of earners to the highest 20 percent.

Those with higher incomes spend more on healthcare annually, but that’s a recent trend reversal.

A Harvard study revealed that after decades of being the largest spenders on healthcare, poor people have now become the lowest spenders — despite having shorter life spans and statistically having more health needs on average. So why the plot twist?

A lot of reasons. The study suggests that the decrease in health spending by America’s poorest citizens (the lowest income number on the chart) can be attributed to stagnant wage growth coupled with a large increase of high-deductible insurance plans. (Deductible = the money that consumers have to pay out-of-pocket before their insurance kicks in.) Researchers say high deductible plans discourage healthcare usage, particularly in lower-income households.

Translation: the people who need healthcare the most are getting less of it — but that doesn’t mean they aren’t feeling healthcare-related financial strain. In fact, they’re bearing the brunt of healthcare costs the most.

Let us explain.

So what does this all mean?

The third column of the table is the most important one and here’s why — it reveals that those with lower incomes are spending more of their overall earnings on healthcare than wealthier people. This means that for poorer folks, healthcare cost burdens are the heaviest.

For example, say friends Bob and Tom both go into a convenience store to purchase some snacks. A bag of chips costs $1. Bob buys two bags at a total cost of $2, while Tom buys one bag for $1. Bob makes $20 a year, while Tom only makes $5 a year. Even though Bob spent more money at the store than Tom, Bob spent 10 percent of his yearly income on chips while Tom spent 20 percent of his yearly income.

Even though rich people are spending more dollars on healthcare than poorer families, low-income families are shelling out more of their cumulative earnings to use towards healthcare and other necessities — a narrative that hasn’t changed in years. Poorer families tend to spend a larger share of their income on essentials like food, utilities, and healthcare while wealthier families have more to set aside for education and retirement.

Moral of the story: it doesn’t just matter how much you’re paying, but how much you have to begin with.

With a new president in town, a new healthcare plan is in the works, but will it relieve or shift the healthcare cost burden for you and your loved ones? Only time will tell.

Truth be told, it doesn’t matter how much you put in the bank every month — healthcare costs are deducting a large portion of your paycheck. How do you help? One way is by fighting against state-based mandates that drive up the cost of insurance for the rich, the poor, and everyone in-between. Agree? Join us.

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