Income Shocks and Out-of-Pocket Health Care Spending: Implications for Single-Mother Families

Grafova, Irina B.; Monheit, Alan C.; Kumar, Rizie

We examine how out-of-pocket health care spending by single-mother families responds to income losses. We use eleven two-year panels of the Medical Expenditure Panel Survey for the period 2004–2015 and apply the correlated random effects estimation approach. We categorize income in relation to the federal poverty line (FPL): poor or near-poor (less than 125% of the FPL); low income (125 to 199% of the FPL); middle income (200 to 399% of the FPL); and high income (400% of the FPL or more). Income losses among high-income single-mother families lead a decline in out-of-pocket spending toward office-based care and emergency room care of $119–$138 and $30–$60, respectively. Among middle-income single-mother families, income losses lead to a $30 decline in out-of-pocket spending toward family emergency room care and a $45–$91 decline in mother’s out-of-pocket spending toward prescription medications. Further research should examine whether these declines compromise health status of single-mother family members.