This paper finds that the incomes of urban households are more vulnerable to health shocks than rural households, that health shocks may precipitate increases in unearned income that partially offset reductions in earned income and large increases in medical spending even among insured households. It also finds that households spend less on food following a health shock, but more on budget items such as housing and electricity. Measures of household health shocks used include a recent death of a working-age household member, a long inpatient spell, and a recent sizeable drop in the body mass index of the household head.