The Cost of Not Getting Care: Income Disparities in the Affordability of Health Services Across High-Income Countries

Introduction

Over the past four decades, government and individual health spending as a share of the overall economy has been steadily rising around the world, partly because of advances in medical technologies and greater demand for health services.¹ In the United States, where administrative costs and health care prices are higher than in other high-income countries, this increased spending has meant higher insurance premiums and deductibles.² Nearly a quarter of the U.S. population is covered by a health plan all year that doesn’t ensure affordable access to care.³

The U.S. is the only high-income country without universal health coverage; about 8 percent of the population is uninsured.⁴ But universal coverage — while critical to ensuring that health care is accessible and affordable — is not always enough. Even some countries that provide coverage to all their citizens grapple with rising health care costs, which can trickle down to patients in the form of higher out-of-pocket costs and, for those with private plans, higher premiums. These costs most severely impact households with low incomes, people of color, and rural residents.⁵

This brief presents the first findings from the Commonwealth Fund 2023 International Health Policy Survey, which engaged adults age 18 and older in 10 countries to explore how financial barriers affect their health care decisions. The survey findings were analyzed by self-reported income level relative to the average annual household income to identify differences in each country between those with lower or average incomes and those with higher incomes. (See “How We Conducted This Survey” and “How We Conducted This Analysis” for more details. Because of data protection and privacy laws, data could not be provided on average annual household income in Sweden. Respondents from Sweden, therefore, were not included in this analysis.)

Survey Findings

While all countries in this analysis, except for the United States, have universal health care coverage, the out-of-pocket expenses patients pay for health services can greatly vary based on health needs, geographic location, and income. These expenses can render certain health services unaffordable to many.

Nearly half of adults with lower or average incomes in the U.S., and nearly one of three with higher incomes, reported at least one cost-related problem accessing health care in the past year, meaning they did not receive medical care or follow care instructions as prescribed. These problems include having a medical issue but not visiting a doctor; skipping a medical test, treatment, or follow-up that was recommended by a doctor; not filling a prescription; or skipping medication doses.

U.S. adults with lower or average incomes were statistically more likely to have a cost-related access problem than their counterparts in the other countries. Nevertheless, roughly a quarter or more of people with lower or average incomes in Canada, Switzerland, Australia, and New Zealand reported at least one cost-related access problem. In nearly all countries, adults with lower or average incomes were more likely to report cost-related barriers to getting health care compared to their higher-income counterparts.

In five of the nine countries — countries where dental care is not included in the standard health plan — one-third or more of adults with lower or average incomes reported skipping dental care or dental checkups because of the cost in the past year. Nearly half in Australia, the U.S., and New Zealand reported doing so. Differences between adults with lower or average incomes and those with higher incomes were statistically significant in all countries except France and New Zealand. Even in Germany, where only 10 percent of adults with lower or average incomes reported skipping dental care, the difference by income level was statistically significant.

Roughly one in five adults with lower or average incomes in the U.S. reported skipping needed mental health care because of the cost, a statistically significant difference compared to those with higher incomes. Not all countries faced such barriers — less than 5 percent of adults in Germany and the Netherlands, regardless of income level, reported cost barriers to accessing mental health care.

In the U.S., nearly half of adults, regardless of income, reported having a medical bill problem in the past year, which includes having problems paying a medical bill or being unable to do so; spending a lot of time on paperwork or disputes related to medical bills; or having insurance deny payment for medical care or not paying as much as the respondent expected. It should be noted that this definition does not include medical debt, which is known to be a significant challenge in the U.S.⁶

Disparities by income level existed in other countries, though at lower rates compared to the U.S.

People with unmet social needs are more likely to need more intensive and expensive medical interventions, make more frequent trips to the emergency room, and face financial barriers to care.⁷ In nearly every country surveyed, adults with lower or average incomes are more likely than their counterparts with higher incomes to have at least one unmet social need. This includes not having enough food, struggling to meet rent or mortgage payments, lacking a clean and safe place to sleep, or not having a stable job or income. Research shows that social drivers of health like these can account for up to 50 percent of health outcomes.⁸

Conclusion

The financial strains associated with accessing health services can negatively impact health behaviors and outcomes for many people.⁹ Our findings show vast income-related disparities in health care affordability in the United States — the only country in this analysis without universal health coverage and broad limits on out-of-pocket health spending.¹⁰ In addition to ensuring coverage for all, the other eight nations generally cap annual out-of-pocket costs for covered benefits, provide cost-sharing exemptions for primary care and certain other services, and offer additional safety nets for people with lower or average incomes and chronic conditions.¹¹ Moreover, compared to other high-income countries, the U.S. spends proportionately less on social services relative to overall health spending, another likely contributor to Americans’ poorer health status and greater need for medical care.¹²

Still, the notable income disparities we found in several other countries suggest that ensuring affordability is a challenge there as well. Having health coverage is important, but that coverage must be both affordable and comprehensive. This tracks closely with other studies documenting health care affordability and the rising cost of health care. For example, in Australia, where roughly one-third of adults with lower or average incomes in our survey reported a cost-related access or medical bill problem, rising premiums in private insurance plans and high out-of-pocket expenses in public plans, have resulted in consumers skipping needed health care and prescribed medications.¹³

Germany and the Netherlands, where affordability problems and income disparities are less of an issue, may point to possible solutions. In both countries, every person is required to have health insurance; there are cost-sharing caps limiting the amount patients have to spend out of pocket; and the cost of coverage is determined by an individual’s income, meaning that those with lower incomes receive more generous government support.¹⁴ In addition, both countries include mental health care in the benefits provided by public health plans, and nearly everyone in Germany, along with most residents of the Netherlands, has dental coverage.¹⁵

Affordability of care is key to equitable health outcomes. National health systems should consider policies and approaches to strengthen benefit design and reduce costs for all.