Jessica S. Banthin

Health care costs have been rising faster than the rest of the US economy for many years and take up an increasing portion of the nation's gross domestic product. In 2004, national health expenditures represented 16.0% of the gross domestic product, up from 13.6% in 1997 and 9.1% in 1980.¹ Out-of-pocket payments for health care services by patients increased from $162 billion in 1997 to $236 billion in 2004. Although health care expenditures are consuming a larger share of the US product, it is not clear to what extent health care expenditures are also consuming a larger share of family budgets. Health care expenditures are not distributed evenly across the population, so we cannot assume a priori that most households are also devoting 16% of income to health care.