Paying Out-of-Pocket: The Healthcare Spending of 2 Million US Families

Abstract

The JPMorgan Chase Institute set out to better understand out-of-pocket healthcare spending among US households. Building off a sample of 2.3 million de-identified core Chase customers aged 18 to 64 between 2013 and 2016, we assembled the JPMorgan Chase Institute Healthcare Out-of-pocket Spending Panel (JPMCI HOSP) data asset in order to explore the levels, concentration, and growth of out-of-pocket healthcare spending and the implications for household financial health. The JPMCI HOSP provides a first-ever look into out-of-pocket healthcare spending for households on a month-to-month basis, at the state, metro, and county level, and as recent as 2016. In this report, we describe the creation of, and initial insights gleaned from, this new data asset. We highlight six key findings. First, out-of-pocket healthcare spending grew between 2013 and 2016, but remained a relatively constant share of take-home income. Second, the financial burden of out-of-pocket healthcare spending was highest for older, lower-income, and female account holders and increased in 2016 for low-income account holders. Third, doctor, dental, and hospital payments accounted for more than half of observed healthcare spending; dental and hospital payments were less common but larger in magnitude. Fourth, out-of-pocket healthcare spending was highly concentrated among a few families—often the same families year over year. The top 10 percent of families spent roughly 9 percent of their take-home income on healthcare expenses. Fifth, families made larger healthcare payments in the months and the years when they had a higher ability to pay. Elevated dental and hospital payments primarily contributed to high healthcare spending. Finally, there was dramatic variation in out-of-pocket healthcare spending between and within the 23 states where Chase has a retail footprint. Families in Colorado spent the most on healthcare, while families in Louisiana spent the highest fraction of their gross income on healthcare.