resource for studying these issues because it has information on income, assets, out-of-pocket medical expenditures on health care services, and also out-of-pocket spending on premiums, plus various demographics and family composition information. In working on this paper, they followed the methods of previous papers in constructing a measure of out-of-pocket financial burden. It is not necessarily a risk index; it is a family-level concept, because family members share resources. The numerator is the sum across all family members of out-of-pocket spending on health care services and premiums. The denominator is family income. The burden is the share of family income spent on medical care, and the resulting values are not truncated. There are certainly cases, as seen in the data, in which people are spending more than 100 percent of income in a given year on health care. Those cases are few, and they are plausible in some circumstances. Banthin explained that because they were charged with thinking about assets, she did a variation on her traditional burden measure whereby she added 5 percent of the total net family assets value to family income for elderly families only. No adjustment was made for the nonelderly. The justification is that nonelderly families until retirement are expected to actually be saving toward retirement. Once they reach retirement, they are drawing down. It is at least an approximation of a way of addressing and incorporating the assets into burden measures.


Elderly Versus Nonelderly

If the median is considered the norm for the elderly and nonelderly populations, then the percentile distribution of out-of-pocket burdens for the two groups might suggest that different thresholds are appropriate for defining high burden. Overall, the median financial burden for elderly persons is 10.7 percent of family income compared with 2.9 for the nonelderly. This means that the median individual age 65 or older lives in a family that spends almost 11 percent of family income on medical care. As expected, younger families devote a much smaller share of family income to medical care. These differences between the elderly and the nonelderly are similar across poverty groups at the median; however, they increase when examined at the higher points in the distribution. At the 75th percentile, the elderly are spending almost 21 percent of family income on out-of-pocket medical care, compared with 7 percent of family income for the nonelderly.

As one would expect, examining the distribution of total net assets by family age groups, at the overall median elderly individuals reported $146,000 in family net wealth, and nonelderly individuals reported $20,000. Thus, elderly individuals have about 7 times as much family net wealth as do

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