compared with an elderly individual or family? If the thresholds are not the same, is there a way to develop a consistent threshold for elderly and nonelderly families that recognizes their very different resources and needs regarding medical care as a part of their overall household budget? In the work that follows, we show that the distributions of burdens for elderly and nonelderly families are quite different. We then investigate the distribution of assets in both groups. Finally, we compute burdens using different thresholds and different measures of resources to define high burdens. One approach incorporates 5 percent of total net assets into the resources available to elderly families to pay medical expenses as a simplified method for drawing down assets in retirement. We do not make this adjustment for nonelderly families, because they are expected to be saving for the future rather than drawing down on current savings.


In a previous study, we estimated changes in annual financial out-of-pocket burdens for medical care, for the population under age 65 (Banthin and Bernard, 2006). Our key estimate of total financial burden included out-of-pocket expenditures for health care services plus out-of-pocket expenditures for premiums as a function of family income. High financial burdens were defined using thresholds of 10 and 20 percent of family income. In another paper we applied a threshold of 5 percent of income to nonelderly families living below 200 percent of poverty (Banthin, Cunningham, and Bernard, 2008). Other studies apply 5 and 10 percent thresholds to indicate high burdens among nonelderly individuals and families (Schoen et al., 2011). Under the Patient Protection and Affordable Care Act, there are premium and cost-sharing subsidies broadly consistent with these thresholds that apply to the low-income population under age 65.

Researchers often take a broader approach in analyzing out-of-pocket medical care spending in the elderly population. Although some papers have looked at annual burdens for medical care, another vein of research has focused on the amount of money needed to pay for medical care, including long-term care, over a lifetime. Among papers that do examine annual burdens, Selden and Banthin assessed changes in annual out-of-pocket burdens for medical care for the elderly between 1987 and 1996 and applied thresholds of 20 and 40 percent of after-tax family income to indicate individuals living in families with high burdens (Selden and Banthin, 2003).

The methodological challenge of comparing the elderly and nonelderly arises because the two subpopulations differ in terms of health care spending as a function of income. Setting a common threshold for both groups against which to assess financial burden or risk is difficult. The reasons for their differences are worth reviewing. The nonelderly population is a

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