Healthcare Cost Variance Across the Population

Just a portion of a much larger KFF article on the affordability of healthcare. This portion of the report looks at severity of needed healthcare and what percentages of the population can afford it. The report splits its findings based upon age, severity, access to insurance, affordability, etc. Age is a large factor with those over 55 accounting for 54% of total spending for healthcare. The report uses 2022 data to support the basis for its findings.

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“How Does Health Care Spending Vary Across the Population? – Health Care Costs and Affordability,” KFF

A Small Share of the Population Incurs Most of Healthcare Spending

In a given year, a small portion of the population accounts for a larger share of health spending. Although we tend to focus on averages, a small number of people spend around the average since individual health needs vary over the life course. Some portions of the population (older adults and those with serious or chronic illnesses) require more and higher-cost health services than those who are younger, healthier, or otherwise in need of fewer or less costly services.

Older People and People with Significant Health Needs Account for Most Health Expenditures

There are people requiring high healthcare expenditures at all ages. Overall, 31% of the population or people 55 and older accounted for 54% of total health spending in 2022. In contrast, the population under age 35 and making up 44% of the population were responsible for 23% of healthcare spending.

People with significant health needs account for a large portion of total health spending. Those people reporting fair or poor health status account for 11% of the population and 27% of the total healthcare spending.

A Small Share of the Population Incurs Most of Health Spending

Some Comparisons

In 2022, the top 5% of people with the highest health spending accounted for half of total health spending and having an average of $67,300 in health expenditures annually. The people with health spending in the top 1% have an average spend of over $147,000 per year. At the other end of the spectrum? The 50% of the population with total health spending below or equal to the 50th percentile accounted for only 3% of all health spending. The average spending for this group was $374.

Out-of-pocket spending (above) on health services is concentrated similarly to overall health spending. In this chart, out-of-pocket spending includes direct payments to providers and cost-sharing, including deductibles, copays, and coinsurance. It does not include monthly premium payments or contributions towards health coverage. Similarly, out-of-pocket health spending is concentrated among high-health-need individuals. A small portion of the population accounts for a substantial share of total out-of-pocket health spending in a year.

In 2022, people in the top 1% of out-of-pocket spending paid about $23,700 out-of-pocket for health services on average per year. People in the top 10% spent an average of $6,126 out-of-pocket per year. People who are in the bottom 50% of out-of-pocket spending spent an average of $24 out of pocket.

Half of Adults Say it is Difficult to Afford Health Care Costs

Almost half of U.S. adults say they have difficulty affording health care costs. One in four say they or a family member in their household had problems paying for health care in the past 12 months. Younger adults (those with lower incomes), adults in fair or poor health, and the uninsured are more likely to report problems affording health care in the past year.

Among those under age 65, uninsured adults (82%) are more likely to say affording health care costs is difficult as compared to those with health insurance coverage (44%) and saying similar.

Those who are covered by health insurance are not immune to the burden of health care costs. About 4 in 10 insured adults worry about paying their monthly health insurance premium, and 62% worry about affording their deductible before health insurance kicks in. Indeed, large shares of adults with employer-sponsored insurance (ESI) and those with Marketplace coverage rate their insurance as “fair” or “poor” when it comes to their monthly premium and out-of-pocket costs to see a doctor.

1 in 3 Adults Report Putting Off Health Care Because of Cost

Cost-related barriers to accessing health care is more common for some demographic groups than others. For example, people who are Hispanic, lower-income, in worse health, and/or uninsured tend to have higher rates of self-reported cost-related access barriers.

One-quarter of adults say that in the past 12 months they have skipped or postponed getting health care they needed because of the cost (KFF polling). Women are more likely than men to say they have skipped or postponed getting health care they needed because of the cost (38% vs. 32%).

Adults ages 65 and older (most of whom are eligible for health care coverage through Medicare) are much less likely than younger age groups to say they have not received the health care they needed due to cost. Three in four uninsured adults (75%) say they have skipped or postponed getting health care they needed due to cost. Insured people are not immune from cost-related barriers to accessing care and more than one in three adults with insurance (37%) report not getting health care they needed due to cost.