Americans are deferring medical care because they can’t afford it, the latest sign that surging inflation is pressuring household spending.
According to a June survey by Morning Consult, a decision intelligence company, 41% of respondents who considered but didn’t purchase a healthcare service over the prior month cited cost as the reason. The survey looks at how price-sensitive various spending categories are, and whether consumers are likely to forgo a product or service or trade down to a cheaper one amid high inflation.
in the analysis, healthcare fell alongside used vehicles and clothing as a good or service that people are relatively more inclined to walk away from if the price is too high. Gasoline and groceries, on the other hand, ranked as essentials that consumers needed regardless of price.
The healthcare findings came as a bit of a surprise. “You don’t really think of that as a discretionary service,” said Kayla Bruun, economic analyst at Morning Consult.
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But healthcare prices can be difficult to determine in advance, and the Morning Consult data didn’t capture whether consumers priced out a particular service and declined it, or whether they determined more generally that they couldn’t pursue medical treatment when their budgets were already strained from paying higher prices on everything else.
In fact, healthcare costs are up less than most other categories of spending this year. while overall consumer prices rose 9.1% on an annual basis in June, medical care services rose just 4.8%. Medical inflation tends to lag behind general inflation, since contracts between insurance carriers and healthcare providers only come up for negotiation periodically.
It’s likely that when contracts are renegotiated, hospitals and other providers will push for higher payments to cover their increased costs over the past year, and some of these costs will filter down to patients, experts say.
“There is a lot of concern about the impact of inflation,” said Courtney Stubblefield, senior director, health and benefits, at
Willis Towers Watson
,
a consulting firm. “The question is, how high is it going to go?”
Write to Elizabeth O’Brien at [email protected]