March 1995

The effects of health insurance on consumer spending

Geoffrey D. Paulin, Wolf D. Weber

In the late 1960's and early 1970's, much of the burden of funding health care shifted to business and government. Households, which in large measure have avoided increasing health care expenditures, may contribute more in the future, affecting nonhealth expenditures. This article examines expenditures for health care and other items in the consumer budget for four distinct groups: the fully insured, the partially insured, Medicaid recipients, and the uninsured. The expenditure data is taken from the BLS Consumer Expenditure Survey.

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