Association for Public Policy Analysis & Management

Objective: The objective of this study is to identify and describe the characteristics of children and their families that are financially burdened by high medical out-of-pocket expenses.

Data: This study used data from the 2014 Current Population Survey, including demographics, health insurance status, medical out-of-pocket spending, and self-reported health status.

Methods: We estimated mean medical out-of-pocket spending by age and examined differences by health insurance status in 2014, the first year of the implementation of the Affordable Care Act. We also calculated descriptive statistics of all children, as well as children in families with household incomes less than 138% of the Federal Poverty Guidelines, at greatest risk of high burden spending using logistic regression models controlling for age, race/ethnicity, gender, citizenship status, parent age, parent education, parent work status, number of children in the household, and family income.

Results: We found that medical out-of-pocket expenses generally increase, as children get older, from a mean of around $200 at year 1 to approximately $400 dollars by the age of 18. Most of the increase in spending is driven entirely by children that are privately insured. Publically insured children’s out-of-pocket pocket medical spending only increases slightly with age. We also observed out-of-pocket spending among children by health status. Children with poorer health have more variance in their spending by age, while healthier children show a steady increase in medical spending as they grow older. In our analysis, we also found that low-income children (<138% FPG) are more likely to be a part of a minority group and non-citizens; fewer of their parents work full-time or have college degrees. Interestingly, there was not much difference across health insurance status between all children and children that live below 138% FPG.

Conclusion: Children’s out-of-pocket medical expenses increase as they get older, possibly because older children increasingly use medical services and are more likely to have private health insurance. However, the drop in out-of-pocket medical expenses among older uninsured children indicates that they are less likely to receive medical treatment, potentially because of cost. Public policies—such as out-of-pocket spending limits—may alleviate medical out-of-pocket spending among older children.