![]() As incomes rose, the total amount spent on healthcare increased from $1,868 for households in the lowest income quintile to $7,219 for those in the highest. Table 2 shows spending on healthcare and its components by these income groups. Likewise the fifth quintile represents the highest earning 20 percent of households (in this case, five categories of household income from 20 percent with the lowest income to 20 percent with the highest). For this article, the first quintile represents the lowest earning 20 percent of households. Quintiles are a way of grouping data into five equal segments (or 20 percent). Table 1 shows household demographic information, categorized by quintiles of pretax income. ![]() Spending on apparel and services also increases with income, but nearly all income groups spend the same percentage of their budget on this category. In contrast, both the dollar amount and the percentage of household income spent on pensions and Social Security increase with household income. For example, as income increases, households spend more money on food but food makes up a smaller percentage of the total household budget. However, the percentage of income that a household spends on a particular category depends on the item. This means that the higher the household income, the greater the dollar amount spent on goods and services. Income is positively associated with most household expenditures. Healthcare spending as a percent of household expensitures, 2005–2014 Year The article first examines the relationship between healthcare spending and household pretax income and then the relationship between healthcare spending and the age of the reference person. This Beyond the Numbers article uses 2014 CE data to examine household spending on healthcare 2 and its components. (See chart 1.) 1 In contrast, average total household expenditures rose from $46,409 in 2005 to $50,486 in 2008, then fell from 2009 to 2011. Consumer Expenditure Survey (CE) data show that household out-of-pocket healthcare spending rose steadily from an average of $2,664 (in nominal dollars) in 2005 to $4,290 in 2014 while the share of the household budget accounted for by healthcare spending held steady at 5.7 percent over the 2005–2007 period, but increased to 8 percent in 2014. Household healthcare spending has increased in dollar amount and as a share of household spending, even during the last recession when average household expenditures (and pretax income) declined.
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