Insurance Health Insurance Health Care Inequality in the US Health Care Inequality Correlates With Income Inequality By Kimberly Amadeo Kimberly Amadeo Kimberly Amadeo is an expert on U.S. and world economies and investing, with over 20 years of experience in economic analysis and business strategy. She is the President of the economic website World Money Watch. As a writer for The Balance, Kimberly provides insight on the state of the present-day economy, as well as past events that have had a lasting impact. learn about our editorial policies Updated on January 6, 2022 Reviewed by Samantha Silberstein Reviewed by Samantha Silberstein Twitter Samantha Silberstein is a Certified Financial Planner, FINRA Series 7 and 63 licensed holder, State of California Life, Accident, and Health Insurance Licensed Agent, and CFA. She spends her days working with hundreds of employees from non-profit and higher education organizations on their personal financial plans. learn about our financial review board Fact checked by Julian Binder Fact checked by Julian Binder Julian Binder is a fact checker, researcher, and historian. They were the recipient of the North American Studies Book Prize (2016, 2017), and they have previous experience as an economics research assistant. They have also worked as a writer and editor for various companies, and have published cultural studies work in an academic journal. As a fact checker for The Balance, Julian is able to utilize their experience as an editor and economics research assistant. Their role as fact checker is to review articles for accuracy, update data as needed, and verify all facts by citing trusted sources. learn about our editorial policies Share Tweet Pin Email In This Article View All In This Article Health Care Inequality Causes of Health Care Inequality How It Affects You Making Health Care More Equal Frequently Asked Questions (FAQs) Photo: Andersen Ross/Getty Images Health care inequality is when one group of people in an economy is in much worse health than another group, with limited access to care. In the United States, health and health care inequality is correlated with income inequality. Research has found that the higher your income, the better your health. One reason health care inequality in America is so high is that it's the only developed country that relies on private health insurance. As a result, those who have corporate-sponsored plans have better access to health care than those who do not. Before the Affordable Care Act, around 20% of Americans had little or no health insurance. As a result, almost 45,000 of those people died each year because they couldn't afford the high cost of health care Others found their savings were wiped out. Many lost their homes and incurred credit card debt. The economy suffered, since half of all bankruptcies were caused by high medical costs. Health Care Inequality Between 2011 and 2013, 38% of those in households making less than $22,500 a year reported being in poor or fair health. Only 12% in households making more than $47,700 a year reported being in poor to fair health, even when both groups were covered by insurance. Note The most affluent 1% of men lived 15 years longer than the poorest 1% of men. The gap for women was 10 years. That's the same number of years that smoking shortens life expectancy. Low-income adults are more than three times as likely as affluent adults to have trouble with the activities of daily living. Chronic illness makes them too sick to eat, bathe, or dress without help. Their children are more likely to be obese and have elevated blood lead levels than those in high-income families. Structural inequality seems to be worsening. Between 1979 and 2007, after-tax income increased 275% for the wealthiest 1% of households. It rose 65% for the top fifth. The bottom fifth only increased by 18%. That's true even adding all income from Social Security, welfare, and other government payments. During this time, the wealthiest 5% increased their share of total income by 10%, with most of those gains going to the top 1%. Everyone else saw their share shrink by 1% to 2%. As a result, economic mobility worsened. The 2008 financial crisis saw the rich get richer. In 2012, the top 10% of earners took home 50% of all income. That's the highest percentage in the last 100 years, according to a study by economists, Emmanuel Saez, and Thomas Piketty. Causes of Health Care Inequality There are six reasons why low-income families have poor health. The Poor Are More Likely to Be Sick A 2013 study found that the number of low-income families in poor health was 15% higher than affluent families. High blood pressure affected 38.6% of the poorest fifth in the study compared to 29.9% of the richest fifth. Disparities in Care Low-income neighborhoods may not have nearby access to the best hospitals, doctors’ offices, and medical technology. This is especially true in rural areas. Southern states also have poorer care than northern ones if judged by health outcomes. Rising Cost of Health Care The rising cost of health care can throw people into poverty. A 2018 study found that medical expenses pushed 7 million people below the federal poverty line. Medical bills have become collection agencies’ biggest business. Every year, around 530,000 people declare medical bankruptcy. Lack of Access to Health Insurance Many of the working poor don't qualify for Medicaid. They can receive a subsidy under Obamacare, but often those policies only cover certain hospitals and doctors' practices. Again, in rural areas, the covered medical services may be insufficient. Note Health insurance companies have been increasing patients' medical costs through higher deductibles, which doubled between 2007 to 2017. At the same time, employers have reduced their share. Between 2006 and 2018, the average deductible in employer-sponsored health plans has risen 255%. Poor Health Can Create Poverty Those with poor health are likely to wind up in poverty. It is difficult to find and maintain a high-paying job if you are chronically ill. Diseases such as alcoholism and drug addiction can make any continuous job impossible. Age The sixth cause is that the elderly are more likely to be unwell. They are also more likely to be poor. In 2016, half of all people on Medicare had incomes less than $26,200. Almost 10% lived below the poverty level. How Health Care Inequality Affects You Health care inequality increases the cost of medical care for everyone. People who can't afford preventive care wind up in the hospital emergency room. For example, it's probably less expensive to treat diabetes with medication than to treat a diabetic coma in the hospital. The Emergency Medical Treatment and Active Labor Act requires hospitals to treat anyone who shows up in the emergency room. These uninsured patients cost hospitals a staggering $10 billion a year. The hospitals passed this cost along to Medicaid. That cost is added to your tax bill. In 2009, almost half of those who used a hospital said they went because they had no other place to go for health care. They use the emergency room as their primary care physician. It's one reason the number of emergency room visits increased from 90.3 million in 1996 to 145.3 million in 2017. Note Even those in the middle class who have insurance face devastation from health care inequality. When it comes to medical bankruptcy, the insured were 6% more likely to have declared bankruptcy in the past than the uninsured. They were not prepared for unexpected deductible and coinsurance costs. Almost two-thirds didn't know their hospital wasn't part of their plan. Around 25% found that the insurance denied their claims. Even those with Medicare aren't safe. The average 65-year-old couple faces $295,000 in medical bills during retirement. Most of them haven't saved enough to pay these bills without destroying their retirement dreams. Making Health Care More Equal Universal health care is a system that provides quality medical services to all citizens. The federal government offers it to everyone regardless of their ability to pay. It has several advantages. It lowers health care costs for an economy. The government controls the price of medication and medical services through negotiation and regulation. It also eliminates the administrative costs of dealing with different private health insurers. Health care providers don't have to hire staff to deal with different health insurance company rules. It forces hospitals and doctors to provide the same standard of service at a low cost. In a competitive environment like the United States, health care providers focus on new technology. They offer expensive services and pay doctors more. They try to compete by targeting the wealthy. That allows them to charge more to get a higher profit. Those who have claimed the Earned Income Tax Credit find their children have a healthier birth weight. Full-day childcare for children five and under leads to measurably healthier adults. Their blood pressure is lower and they are less likely to be obese. Community-based health clinics help reduce health care inequality in low-income areas. It's critical that they teach patients how to care for their chronic diseases. Studies show they can improve the health statistics in the neighborhood. Frequently Asked Questions (FAQs) How much does the U.S. spend on health care? The federal government spends more than $1.1 trillion on health and Medicare, or about 30% of the federal budget. Annual national health spending by all entities was $4.1 trillion in 2020, including $388.6 billion in out-of-pocket costs for patients. How much does health care cost in the U.S.? For an employee who gets health care through their employer, the average cost is roughly $1,440 for a single person ($5,700 for a family). That doesn't include an average out-of-pocket expense of about $1,181 per person annually. Was this page helpful? Thanks for your feedback! Tell us why! 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