Financial Protection against Health-Cost Shocks: A Harmonized US– Nigeria Comparison of Catastrophic Spending, Underinsurance, and Out-of-Pocket Tail Risk

Abstract

Background. Catastrophic-spending rates count households crossing a threshold and say nothing about the size of the worst losses. Actuarial tail measures can describe those losses, but a ratio’s upper tail depends on how its denominator is built, and survey denominators differ between countries. Methods. We compared out-of-pocket burden in the Medical Expenditure Panel Survey (2019–2024, 63,799 family-years) and the Nigeria General Household Survey-Panel (2023/24, 4,685 households) on identical catastrophic-spending definitions, then applied expected shortfall and generalized Pareto tail estimation with a weighted likelihood and design-based bootstrap intervals. Because US resources are income and Nigerian resources are a consumption aggregate that contains the out-of-pocket spending, every tail comparison was repeated on matched denominators, on two-year income for panel-linked US families, and on spending levels in international dollars. Results. Nigerian households exceed a 10% budget share 2.3 times as often as US families (17.2% against 7.4%) and carry a heavier burden at every quantile. On the published denominators the US tail index is 0.67 and the Nigerian 0.09, but the gap is an artifact of the bounded Nigerian ratio: on matched constructions the indices are 0.67 and 0.58 (p = 0.35), and 0.47 and 0.42 for spending levels. Both distributions are heavy-tailed. Poverty raises the 95th percentile of burden by 25 points in the United States and 11 in Nigeria. Conclusions. Nigeria has the heavier burden throughout its distribution. Cross-country tail comparisons require denominators built the same way; the SDG consumption basis cannot support them.