Households with the lowest earnings contribute the most on a share per income basis to the U.S. healthcare system, says a RAND Corporation study.

Despite higher income American households paying the most in funding for the nation’s healthcare, only an average 16 percent of their incomes goes toward the system, compared to 33.9 percent of incomes from homes in the bottom fifth of income groups. Households in the middle three income tiers pay between 19.8 percent and 23.2 percent of their income toward healthcare.

“On average, low income households pay a larger share of their income toward health care than higher income households,” Katherine G. Carman, senior economist at the nonprofit RAND Corporation, told HCB News. “This occurs for two reasons. First, we included long-term care expenses in our analysis, and that can place a large burden on households as they spend their savings in order to qualify for public benefits. Second, some low income households in poor health face extremely high out-of-pocket expenses.”

Funding for healthcare is often facilitated through insurance premiums and out-of-pocket costs, as well as through less visible ways such as employer-paid premiums and taxes. Healthcare spending in 2015 accounted for nearly 18 percent of U.S. gross domestic product.

Whereas previous research examined the distribution of healthcare financing, the RAND Corporation took into account payments made to finance healthcare, the dollar value of benefits received, and the impacts on different groups based on age, source of insurance and size of income. It also claims to be the first to include costs made by individuals to nursing homes and other institutions, a decision that yielded higher estimates in healthcare spending.

More than 18 percent of average household income goes toward U.S. healthcare, or a total of $9,393 per person. The most obvious form of payment is out-of-pocket spending, which includes insurance premiums. That, however, accounts for just 9.1 percent of healthcare costs, with the vast bulk paid through health insurance premiums and taxes, according to the study.

Americans with Medicare received the greatest dollar value of healthcare, due to the fact that older people seek out more healthcare services. They receive the largest dollar value of healthcare as a percent of income, which corresponds to lower income status and generally poorer health within the group. Individuals with employer-sponsored insurance receive the lowest dollar value.

Lower-income individuals in general are more likely to benefit from the redistribution of funding by others toward healthcare services, with households in the three lowest income groups receiving more healthcare services than they pay for through any form of payment. Those who require long-term care, however, must often spend most of their savings in order to qualify for public benefits. The highest of the five income groups pay more than they receive as healthcare services.

Carmen says the findings indicate a more regressive system for healthcare funding than previously suggested by earlier studies, and hopes that the study here will open up greater dialogue for how to improve the distribution of funds for U.S. healthcare from households and individuals with different incomes and conditions that affect their economic status.

“Our paper documents the large burden placed on low-income households, and provides a jumping off point for discussions of policies that would change our health care financing system,” said Carman. “Before we can discuss policies that would reduce the burden on low-income households, we must first understand the burden they currently face.”

Researchers relied on information from the Survey of Income and Program Participation, the Medical Expenditure Panel Survey, the Kaiser Family Foundation/Health Research Education Trust Employer Health Benefits Survey, the American Community Survey and the National Health Expenditure Accounts. They considered taxes and employer contributions for all payments from households toward healthcare, in their estimates.

Support for the study was provided by the Robert Wood Johnson Foundation as part of its work to build a culture of health. Other authors of the study are Jodi Liu and Chapin White.

The findings were published in the journal, Health Services Research.