Rural and regional Australians suffer financially from chronic health costs

Posted May 17th 2007

by DPS

Rural and regional Australians with chronic illnesses are spending up to 27% of their total household income on health-related expenses, according to a new study published in the latest Australian Health Review.

Forty percent of people with chronic illnesses from rural and regional areas are living below the poverty line, according to research conducted by the Chronic Illness Alliance and funded by the Reichstein Foundation. This is three and a half times greater than the estimated 12.2% of the total of Australian couples with two children living in poverty.

Many of the people studied as part of this research were experiencing financial distress which means they may not be able to afford such things as repairs to washing machines and fridges.

The greatest contributor to both poverty and financial distress experienced by people participating in this study was the cost of medications, representing between 21%–31% of total health care costs.

Eighty seven percent of all households had bought medications covered by the Pharmaceutical Benefits Scheme (PBS) with spending averaging $52 per month. Sixty seven percent bought over-the-counter medications with spending averaging out at $62 per month, and 20% of households with incomes of $25 999 or less per annum reported that medication costs caused them major financial problems.

While government subsidies are higher for high level users of PBS medicines and those on lower incomes, the research found that households in the lowest income groups, which nearly all had concession cards and were eligible for medications at the concessional PBS rate, still averaged 21% of their health costs on medications.

Another factor contributing to the financial stress of families in rural areas dealing with chronic illness is the loss of income resulting from time taken off work to receive health care or to care for a sick family member. This was significant for households on incomes of $13,000 or less but was particularly important for families on higher incomes with 36% of households with incomes above $52,000 losing income averaging $5,337 per annum.