August 23, 1999 (The Editor’s Desk is updated each business day.)

Health insurance now accounts for biggest share of health care dollar

Between 1987 and 1997, health insurance supplanted medical services as the largest component of consumer health care expenditures in every region. In one region, the Northeast, the share of health care spending going toward insurance was over 50 percent in 1997.

[Chart data—TXT]

The proportion of out-of-pocket health care spending on insurance in the Northeast was 32.5 percent in 1987 and in ten years this share had risen to 51.0 percent. As a result, the Northeast went from having the smallest share spent on insurance to having the largest. The share of health-care spending devoted to medical services in the Northeast fell from 43.9 percent in 1987 to 28.1 percent in 1997.

There was a somewhat similar pattern of change across the country. In each of the regions, the biggest share of the consumer health care dollar was spent on medical services in 1987 and on health insurance in 1997. For each region, the share devoted to health insurance increased by at least 10 percentage points and the share devoted to medical services decreased by at least 10 percentage points over the period.

These data are a product of the BLS Consumer Expenditure Survey program. Additional information is available from "Issues in Labor Statistics: What the Nation Spends on Health Care: A Regional Comparison," (PDF 20K).