An 18-year review of federal household health data shows a widening divide in U.S. healthcare spending: households in the highest income quintile experienced steady spending growth, while those in the lowest quintile saw little to no increase — and in recent years actual declines.
Spending divergence over nearly two decades
Researchers examined data from the Medical Expenditure Panel Survey Household Component (MEPS-HC) covering 2005 through 2023 and grouped households into income quintiles based on family income relative to the federal poverty level. The analysis adjusted for age, health status and chronic disease so the results isolate income-related differences rather than demographic or morbidity factors.
The study segmented the timeline into three periods: 2005–2013 (pre-Affordable Care Act), 2013–2017 (ACA implementation), and 2018–2023 (post-survey redesign). Across the full 2005–2023 interval, the top income quintile saw healthcare spending rise about 1.8% per year, while the bottom quintile recorded no net growth.
“Healthcare spending,” as described by MEPS-HC includes direct payments for office visits, hospital outpatient care, inpatient stays, emergency department visits, home health, and prescription drugs.
Shifts during ACA rollout and afterward
The study found the pattern varied by period. During the ACA expansion window of 2013–2017, lower-income Americans increased their spending at a faster clip than higher-income households — an annual increase of about 4.4% for the bottom quintile versus 0.7% for the top quintile. That likely reflects insurance gains and improved access tied to the ACA.
But from 2018 through 2023, the trend reversed: spending among the top quintile rose roughly 2.5% per year, while spending in the bottom quintile fell by about 2.5% per year. The analysis indicates much of the higher-income spending went to outpatient care and prescription drugs.
| Period | Top Quintile Annual Change | Bottom Quintile Annual Change |
|---|---|---|
| 2005–2023 | +1.8% | 0% |
| 2013–2017 (ACA) | +0.7% | +4.4% |
| 2018–2023 | +2.5% | -2.5% |
What the numbers represent
MEPS-HC tallies direct payments for a broad set of medical services and prescription drugs; it does not count over-the-counter purchases and excludes uncompensated charity care. By adjusting for age and chronic conditions, the researchers aimed to measure the relationship between spending patterns and income alone.
- Higher-income households consistently increased spending over the full study period, especially on prescriptions and outpatient services.
- Lower-income households saw temporary gains in spending during ACA expansion, but those gains reversed after 2017.
- The divergence raises concerns about unequal access to care and financial pressures that may suppress healthcare use among lower-income Americans.
The findings point to a complex picture: policy changes such as the ACA can temporarily narrow spending gaps, but longer-term dynamics — including shifts in drug costs, outpatient utilization and economic pressures — appear to have reintroduced or deepened disparities afterward.
Policymakers and health system leaders closely track such trends because spending patterns often reflect access to care and, ultimately, health outcomes. If lower spending among poorer households represents foregone care, the result could be worsening unmet needs and downstream costs. Conversely, rising spending among wealthier households may reflect greater access to higher-cost services or prescription drug use.
Further research will be needed to connect spending changes to measures of health outcomes, insurance coverage shifts and the role of medical price growth versus utilization. For now, the analysis underscores that national averages can hide important disparities when examined by income.
