Medical payments in perspective

The news: In May, President Barack Obama delivered a speech on reducing the high cost of healthcare, saying that “the stars are aligned” for reform.

Behind the news: African Americans are least likely to pay “out of pocket” for their medical expenses, though only a third of their population is covered by private insurance, according to the U.S. Department of Health and Human Services’ Agency for Healthcare Research and Quality.

The agency’s nationwide survey found that 12.4 percent of medical payments by black respondents were made out of pocket in 2006, the latest year for which data are available. By comparison, Asian respondents made 20.4 percent of their payments out of pocket–”the highest among all racial and ethnic groups.

Meanwhile, private insurance covered 33.9 percent of expenses for African Americans–”second lowest behind Latinos, for whom it covered 30.7 percent of expenses. Nearly 44 percent of white respondents’ expenses were covered by private insurance–”slightly behind Asians, at 48.5 percent.

Edward Mensah, associate professor of health economics at the University of Illinois at Chicago, said the figures seem to reflect different levels of income among the groups. Low-income populations tend to have a smaller disposable income to pay out of pocket for medical expenses. “Healthcare is not on the top of the list for low-income people,” he said.

Mensah added that low-income people see public health coverage, such as Medicare and Medicaid, as a cheaper means of payment than private insurance. “The poor are effectively priced out of private insurance,” he said.

African Americans and Latinos were most likely to rely on Medicare, Medicaid and other publicly funded sources of payment. Medicaid, for example, was the source of payments for 20.2 percent for African Americans and 24.1 percent for Latinos, while it covered only 5.2 percent for white respondents.

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