Accounting for the burden and redistribution of health care costs: Who uses care and who pays for it

OBJECTIVE: To measure the burden of financing health care costs and quantify redistribution among population groups. DATA SOURCES: A synthetic population using data combined from multiple sources, including the Survey of Income and Program Participation (SIPP), Medical Expenditure Panel Survey (MEPS), Kaiser Family Foundation (KFF)/Health Research Educational Trust (HRET) Employer Health Benefits Survey, American Community Survey (ACS), and National Health Expenditure Accounts (NHEA). STUDY DESIGN: We estimate two dollar amounts for each individual in the synthetic population: (a) payments to finance health care services, which includes all payments by a household and their employers to finance health care, including premiums, out‐of‐pocket payments, federal and state taxes, and other payments; and (b) the dollar value of health care services received, which equals the amount paid to providers for those services. DATA EXTRACTION METHODS: We linked the nationally representative survey data using statistical matching. We allocated health care expenditures from the NHEA to individuals and households based on expenditures reported in the MEPS. PRINCIPAL FINDINGS: We show that higher‐income households pay the most to finance health care in dollar amounts, but the burden of payments as a share of income is greater among lower‐income households. CONCLUSIONS: Accounting for all sources of payments provides a clear picture of the burden of financing health care costs, and how that burden is spread under our current financing system.