Another point he mentioned is that people think a lot about the year 2014 because the ACA is going to be implemented and lots of things are going to be changed, some of which have been mentioned. One potential value to all this is that it provides a way to measure the impact on people who have insurance now and will remain insured, but their risk for out-of-pocket expenses may be reduced. There are measures of insurance, which will be available after the ACA, so one will be able to say what the impact is on insurance. However, there is the danger that some people may actually show up as poorer because their insurance is covering more and the premium costs are higher.

His last point is that, because of the concern about 2014, there is a lot of concern about 2013 and having a baseline to understand the impact of 2014. And therefore it worries him to hear the suggestion to wait until the ACA is in effect, and then things will be standardized and there will be new data. It will be very important to have all these measures as of 2013, he said, so that when the data on 2014 are available one can say this has changed or has not changed or may have changed in an unexpected direction.

Willard Manning (University of Chicago) stated that he can very well build a model that allows him to produce an expected amount from a data set by adding up across components or across family members to get an expected expenditure under a variety of controls. But one of the issues that comes up in the Handel approach is that one is talking about either variances in the simple cases or whole distributions. There are a number of issues to think about. Services are correlated; family members are correlated. Some families have members who are all very healthy, but some will have one member who is more ill than the others, maybe not by much, especially with the elderly. How does one deal with situations in which, when building up expenditures in the Handel approach, one ignores all of those covariances? And one knows that all of those covariances are positive and are actually increasing the dispersion, rather than making it smaller.

Meier responded that, on some level, she has just deferred to the methods in the Handel paper. The specific model that was employed was supposed to take care of these points, although she thinks that family members are treated as being fully independent in the model, which could be problematic. That said, not at the level of the statistical modeling, but at the level of the actual measure, Meier would want expenditures to be modeled as if people were acting on their own. That might sound strange, she said, but one would not want parents to be forgoing services because there was only so much money in the family and they decided to devote their medical care money toward the children in the family, for example. She stated that she knows that in the data indicate decisions in which families are operating as a unit and are allocating their consumption in certain ways. But ideally



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