Giving Compass' Take:
- Aaron Klein and Kavita Patel discuss how income instability and rising health care costs force people to delay seeking medical care for serious conditions.
- Why is income volatility rising? How can this research on health care decisions inform the actions of policymakers and funders?
- Read more about health care costs and income volatility.
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Edward had a good job, health insurance, and good wages. Then he received an unexpected bill for $1,800 for treatment of an infected tooth. He applied for a medical-expense credit card and paid half the amount with that card, the other half out of pocket in cash – coming up with $1,800 at once is hard for most Americans. Edward and his family may reconsider the next health decision they have to face simply due to the uncertainty around cost. This story comes straight from new research by University of Pennsylvania’s Mina Addo and Lisa Servon, a study which sheds unique light on the problem of affording health care, shattering the myth that increasing health care access alone is the solution.
Their research involved qualitative interviews with individuals who were employed, racially diverse, and mostly had employer-sponsored health insurance. More than half of the sample exhibited income volatility, a trend that has been rising since the1970s. Income volatility often stems from changes to secondary income sources, and it can be an important indicator of economic insecurity when workers depend on multiple income streams to supplement insufficient wages from a primary job.
Living paycheck-to-paycheck has a unique way of focusing priorities and decisions: if I see a doctor, will I still have enough money to make rent? This is reality for millions of Americans, including a growing number in the middle class as incomes become less stable and health care costs continue to rise. Unfortunately, policy is often based on data that ignore this volatility, such as annual income, while simultaneously assuming a level of transparent pricing of health care costs that does not exist. The result is a system that does not work in practice for many, forcing people to delay medical decisions: one out of every four families reported delaying medical care for a serious medical condition due to cost in 2019. Delaying health care can worsen health outcomes and drive up total health care costs.
Read the full article about health care decisions by Aaron Klein and Kavita Patel at Brookings.