the population under age 65, and whether the policy is fair in the same way.

Another major comparison is across geography in terms of cost of living and the costs of health care. That area has a lot of unknowns: Is the average right, is the lowest level of spending right, is the top level of spending right, and what drives those differences in health care spending in many cases?

It is important to think about comparisons over time. If risk is to be used to measure the value of health reform in providing various protections, then measures need to capture changes through time. Comparing different kinds of health care needs is also important. Is risk really more important for people who have untoward, acute care consequences—a car accident, a surgery gone wrong—than for chronic conditions for which the burdens are high, increasing, and persistent?

In closing she had a question for Jessica Banthin: When talking about treating resources differently for the elderly and the nonelderly, what is the right age cutoff? Is age 75 the new 65? Also, there is the issue of when people spend down their assets. She gave as an example the case of some of her friends with children in college, who are not talking about spending down, but about working and accumulating assets.


Banthin responded to Moon’s question that she would have preferred to do the adjustment based on retirement status. That is the proper way, she said, because eventually the cutoff should be age 67, not 65. When people decide to stop working is when they have stopped saving and have moved into retirement, when they are presumably spending down. She thought that would be the most accurate cutoff point.

Hurd commented on Banthin’s numbers about the different levels of spending on health care for the elderly and the nonelderly. One thing to keep in mind—and this shows up very clearly in the Consumer Expenditure Survey as well as in HRS spending data—is the budget shares that go to health care spending. Of course, the shares do increase with age, and that is quite reasonable, he said. There is no reason they should be the same for a 45-year-old as an 85-year-old; it is much more productive to spend on health care at age 85.

At the same time, other components of the budget correspondingly decline, which is also very reasonable. For example, spending on private transportation declines from around 15 percent of the budget down to 6 percent. So it is not prima facie a problem that the older population spends a greater fraction on health care; it is because it is more productive. Whether it should be more than 10 percent or more than 20 percent is not known.

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