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

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.