gone up from 22 to 31 percent from 2007 to 2010, and it is going to go up again this year.

Next, using data from MEPS, Claxton described out-of-pocket shares for people with nongroup insurance and group insurance over time. They found that the people with nongroup insurance spend more than half of their total health spending out-of-pocket. That number is pretty persistent. It comes down a little bit over time, but generally it is substantially different than that for people with employer-sponsored insurance, and that is true for both the mean and the median.

He commented on some of the discussion in the earlier session. Work with the American Cancer Society shows that the people who run into trouble are those who have limits on the amount of spending that their policy covers, for example, for radiation. Or they have no real out-of-pocket maximum for drug coverage, and they need biological drugs. Although these situations are fairly rare, their effects can be very large. One does not know about these limits when buying a policy, because this is really a fine point. It is not that uncommon to see a limit on rehabilitation of $3,000 annually in a policy, which may not be adequate if, for example, one has a stroke.

On another point, there was a lot of talk about actuarial value. Actuarial value can mean many things, and it may or may not be related to an actual scope or breadth of benefits in a benefit package. It can be just the percentage of whatever is covered that is paid for. So if the package covers only hospitalization and it pays for all hospitalization, it has an actuarial value of 100 percent.

To relate it to a broad benefit package, for example, one can talk about what percentage of all spending this insurance would cover. But cutting out services for relatively rare events would not affect the actuarial value very much at all. So, for example, one could take out all spending for biological drugs and change the actuarial value 1 or 2 percent. But for the people who need those drugs, that would wipe them out. So it is very hard to actually characterize these policies as protective, if the topic is the out-of-pocket expenditures that people have for catastrophic risk.

Health reform may or may not help with some of these things. There will be an essential benefit package, potentially, but how much it will deal with the scope and duration limits that insurers are allowed in the benefit package is unknown. Also, large employers and self-funded employers are not subject to the essential benefit package.


James Ziliak (University of Kentucky Center for Poverty Research), session discussant, organized his discussion into three unifying themes across the three presentations:

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement