Out-of-pocket health costs rising for low-income households: study

April 17, 2014 — Out-of-pocket health expenses rose sharply from 1997 to 2009, with low-income households taking the hardest hit, a new study from Statistics Canada reveals.

Low-income households saw their health-care-related costs rise by 63 per cent over that period, compared to an increase of between 36 and 48 per cent for higher earners, the report says.

In 2009, households with the lowest incomes spent about $1,000 on health care, compared to almost $3,000 for top earners.

While
those numbers may not seem enormous, for a significant portion of
families in the lowest income tier that outlay represented more than
five per cent of the household's after-tax annual income.

In
2009, nearly 40 per cent of households in the two lowest income brackets
reported spending more than five per cent of after-tax income on health
costs compared with 14 per cent of households at the top end of the
income spectrum.

The report says out-of-pocket health-care
spending represented 5.7 per cent of after-tax income for the lowest
income households, compared to 2.6 per cent for the families at the
highest end.

The study raises concerns about whether expenditures
at that level are sustainable for people in the lower income tiers,
questioning whether they may lead to lower use of certain health-care
services.

It also notes that there is recent Canadian evidence
that shows almost 10 per cent of people who receive a prescription
either don't fill it, don't renew it or do something to stretch out the
drugs because of cost constraints.

The three biggest components
of out-of-pocket health-care spending were dental care, prescription
drugs and health-related insurance premiums. How a household distributed
its out-of-pocket spending among those three components depended on
where on the income spectrum the family was.

In 2009 lower-income
households spent more on prescription drugs than they did on dental
care or insurance. For higher-income households, insurance was the
biggest expenditure of the three.

The authors of the study note
that it has some limitations, including the fact that the survey from
which the information was drawn collected self-reported data.
Self-reported information is subject to what's called recall bias –
memory problems.