based on its actuarial value, then one can get away from individual expenditures and applying a lot of complicated deductibles and coinsurance and so on. If a strong argument is made that everybody should have some guaranteed cap on their out-of-pocket expenses—and the ACA certainly moves in that direction—then that is a critical piece of information.
She noted that there had not been much discussion of Medicare. Here, the gap in Part D would have to close totally to get to an out-of-pocket cap for prescription drugs. Also, one of the main reasons for buying Medigap insurance is that Medicare is still an open-ended liability, as there is no cap on Part B, which covers services by doctors and other providers (Part A covers hospital services).
Meier had a couple of comments. First, there is a very important difference between measuring whether someone is at risk and how much they are at risk and measuring how much it would cost to protect them against risk. The index that she and Wolfe propose would be a measure of whether someone is at risk and how much they are at risk. If someone does have insurance that protects against risk, then the question becomes how that insurance narrows the spectrum of potential outcomes that this person could have.
Second, they do address Medicaid in their paper. It is a well-known problem that not everyone who is eligible for Medicaid applies for it. In their approach, an individual who has not taken up Medicaid is at risk at that moment. However, one can assess the person’s eligibility for a program that protects against risk.
Both these issues need to be addressed, she said, but it should be understood that they are two very different things. Moreover, it is not up to Wolfe and her to spell out the vision of moving forward—it is up to the study panel, which needs to be clear on what it wants to measure. And to take that a step further, the ACA is designed with the mandate that everyone should be insured. And the question for the study panel is whether it wants to develop a measure that assumes that is the case and that public policy is directed at ensuring that individuals have enough money to purchase the insurance. Or does it want to design a measure that actually reflects people’s current experience? They are two different things.
Meier noted that her presentation did not mention that the discussion of risk cells in the paper does not advocate an expected value approach, because expected value, instead of examining the spectrum of potential outcomes, gives one singular measure that is a poor representation of risk in the catastrophic context. That measure is not one they advocate, she said. Rather, they have advocated looking at a family’s probability of falling at the catastrophic end of their potential spectrum of outcomes.
Kyle Caswell (Census Bureau) observed that the conceptual framework first tries to identify some sort of baseline level of risk. It then tries to pos-