Holes in the Safety Net: Racial Disparities in Healthcare Spending in the United States

• In Event: 106 - Open Refereed Roundtable Session I
  In Refereed Roundtable: A. Table 08. Inequality and Health

Abstract

Research on racial disparities in health and healthcare shows that Blacks experience poorer health and enjoy less comprehensive health insurance coverage compared to Whites. Yet how these health and insurance disparities translate into actual medical expenditures and affect households’ financial burden remains unclear. Prior research suggests two competing sets of hypotheses. The safety net reliance hypothesis suggests that Blacks’ poorer health leads to increased use of medical services compared to Whites. Combined with poorer insurance coverage and greater reliance on publicly provided care, Blacks’ greater healthcare utilization results in larger out-of-pocket medical expenditures compared to Whites of similar socioeconomic status. The restricted access hypothesis suggests instead than Blacks face significant barriers in accessing quality medical care. These difficulties, caused partly by residential segregation and racial biases in medical institutions, lead to lower use of healthcare services. Lower utilization is reflected in turn in lower out-of-pocket medical expenditures but greater unmet medical needs for Blacks compared to Whites. We use medical spending data from the 2004 to 2012 Consumer Expenditure Survey (CE) and propose a series of specific models allowing us to adjudicate between these hypotheses. Our results suggest that Black households have lower access to medical goods and services compared to White households and provide strong support for the restricted access explanation of racial health gaps.

Authors

• Raphael Charron-Chenier, Duke University

• Collin William Mueller, Duke University