Income volatility and health care decision-making


Income volatility has been rising since the 1970s and reflects a decline in economic security among middle- and low-income households. Half of all American adults are affected by chronic illness, and 40 percent of adults who have health insurance have difficulty paying for medical care (Claxton et al., 2017). Considering these trends together, this study explored characteristics of households that experience income volatility and medical expenses, how they pay for health care, the extent to which technology (including fintech) can be a solution to their challenges, and factors influencing their health care decision-making.

Key Findings

  • The study population has some economic and social advantages but is also showing signs of financial precarity.
    • The study population included prime working age adults (aged 27 through 55), was primarily female (79% female, 21% male), highly educated (more than half had at least a BA/4-year college degree), racially diverse (70% non-white, 30% white), median income of $60,000.
    • More than half of the sample depended on multiple income sources to make ends meet. Income volatility stemmed from changes to secondary income sources. Income volatility can be both an indicator of and response to economic insecurity when workers depend on multiple income streams to supplement insufficient wages from a primary job.
    • Most were familiar with fintech (such as banking, budgeting, and credit monitoring apps) but did not see it as a solution to fundamental financial challenges they faced.
    • The majority of the study population had health insurance, and more than three quarters had employer sponsored plans. But health insurance was not enough to make health care affordable, beyond primary care or preventive services.
  • Health insurance was a source of uncertainty in health care decision-making. Some participants opted to skip or delay care due to cost, or when they couldn’t anticipate the cost of treatment.

Overall, the results show a need for higher wages and affordable comprehensive health benefits to ensure access to care beyond primary care and preventive services.

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