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Coping with the Cost of Healthcare

by Julie Siwicki of the Financial Access Initiative

The Center for Disease Control reports that nearly half of all adults in America have a chronic health condition – a health problem like diabetes, arthritis, or obesity that limits behavior for long periods. Chronic diseases are not only among the most common medical issues faced by Americans. They’re also the most costly, accounting for 84 percent of all health care spending in 2006. The burden of medical costs in America is no secret. And the question of how people – especially the poor – can afford to stay healthy remains wide open.

The ratio of adults with chronic conditions in the overall U.S. Financial Diaries sample roughly matches the nationwide figure. Chart 8.2 looks at the household level, illustrating the number of  chronic health problems  per capita in each family: Sixty percent of the sample’s households have at least one condition per member, and almost a third of them have more than one.


Yet the figure above risks misrepresenting certain households due to a rounding bias. For example, a family of 5 with two unhealthy members have a per capita chronic condition rate of 20%. This number rounds down to zero, making it look like the family has no health problems at all. An alternative way to see chronic condition incidence in our sample is the percent of households that have at least one: 75 percent. And the chart below breaks out the number of members with a chronic disease within each household.


Insurance coverage helps households manage health care costs. Our field research took place before the ACA requirement for coverage took effect. At that time nearly two-thirds of adults in the sample had some kind of health insurance. Unsurprisingly, this figure drops for undocumented adults, as shown in chart 8.5. Yet it does not vary much by the head-of-household’s immigrant status (see chart 8.4) or by income level.

While income level may not affect the sample’s rate of insurance coverage overall, it is associated with the type of insurance plans held. Chart 8.1 shows that as income rises, the portion of household members covered by Medicaid decreases from 59 percent (for households below the poverty line) to 26 percent at the highest income level – just as non-Medicaid coverage rates increase. Note the similar size of each bar’s top two sections in chart 8.1.


Despite having insurance, health care costs bite families’ budgets. For instance, we begin to get a sense of health-related financial strategies by asking households how they manage spending on medications. Results in chart 8.3 show that at least one-fifth of those with prescriptions report reducing their intake in some way: skipping doses, taking less than prescribed, or delaying filling the order.


This is part of a series explaining initial findings from the US Financial Diaries. The project is lead by principal investigators Jonathan Morduch (NYU) and Rachel Schneider (CFSI).  Julie Siwicki was a field researcher with the project and is now a research associate. The views expressed therein are those of the author, and not necessarily of the USFD project or its funders.