Ziliak remarked that it was not clear to him why there are different definitions of high medical out-of-pocket spending, depending on income status. In Collins’s presentation, out-of-pocket spending greater than 5 percent of income was considered a high burden for those with annual incomes less than 200 percent of the federal poverty line, and greater than 10 percent of annual income for those above 200 percent of the poverty line. Cunningham’s talk defined burden mainly at 10 percent, except once when he chose a 9.5 percent cutoff for out-of-pocket premiums.
Ziliak thought that it would be useful to choose one number. The question is, should that cutoff of high burden percentage be an endogenous function of the person’s actual spending behavior, or should it be a fixed number closer to the median? Also related to that, high out-of-pocket spending is somewhat of a Southern problem. Using the official Census Bureau definition and state-level poverty rates for 2008, by and large poverty is concentrated in the South at the state level. So choosing a 5 percent cutoff for those living below 200 percent of the poverty line means picking up a higher percentage of people in the South. Also, poverty is known to be correlated with poor health outcomes and is probably also correlated with out-of-pocket spending and lack of insurance.
But to make cross-state comparisons without confounding where the poor live, per se, with how medical out-of-pocket spending is occurring as a fraction of income, one might want to choose one particular cutoff, not different thresholds based on income status. Ziliak suggested using a compromise number between 5 and 10 percent, say 7.5 percent. Choosing a fixed line might improve cross-state comparisons.
Given the salience of the measure of medical care economic risk to the Supplemental Poverty Measure (SPM), perhaps using the same measure of cost of living that is currently being adopted by the Census Bureau for the SPM would potentially improve compatibility between some notion of medical care cost measure and the SPM.
He reported on a conference in April 2011, cohosted by his center with the Census Bureau and Brookings Institution, called Cost of Living and the Supplemental Poverty Measure. Its key recommendation to the Census Bureau was a slight modification of what it is currently doing, which is that the adjustment for geographic housing price differences should be based on quality-adjusted rental costs, not making any adjustments for ownership free and clear or ownership at all. That is readily available data in the American Community Survey (ACS). Given the size of the ACS, it is