to use actual spending in its SPM estimates. Assessment of potential risk should be done using separate measures of medical care economic risk that take into account such characteristics as age, health status, whether or not the family or individual has insurance, and insurance benefit designs. It will be important to keep metrics that assess burden anchored in retrospective costs—what actually happened—and distinct from measures of risk that predict medical spending prospectively to assess the population at economic risk as a result of being uninsured or inadequately insured.
MEDICAL CARE ECONOMIC RISK
At the same time, we agree with the 1995 panel recommendations that it is important to also develop a new measure of medical care economic risk that prospectively assesses financial risk to low- or middle-income families who are either uninsured or inadequately insured given their incomes and health status. The latest data from the Census Bureau indicate that about 50 million people, 16.3 percent of the noninstitutionalized population, were uninsured in 2010 (Short, 2011).7 If individuals live in families that do not have sufficient income to meet their nonmedical needs and thereby qualify as poor, it should follow that all of the uninsured who are poor will not be able to “afford” their needed medical care without facing a bigger deficit with regard to their nonmedical needs. In other words, any uninsured family or person considered poor based on income, not counting medical care spending, is at risk because the SPM poverty thresholds, by design, do not include an allowance for medical care needs and instead subtract out-of-pocket medical care spending from resources. (It is also arguable that the official poverty thresholds, first developed from 1955 data for 1963 and updated for inflation since that time, do not include an adequate allowance for today’s levels of medical care.) The SPM estimates only disposable income needed for housing, food, and other nonmedical necessities. Although the poor are at the greatest risk of being uninsured (31.4 percent were uninsured in 2010—almost twice the average rate in the population), the poor constitute only 29.1 percent of the uninsured population.8 The majority of uninsured individuals (62.8 percent) live in families whose incomes are more than 125 percent of the poverty threshold. But how many of these individuals could “afford” to have their health care needs addressed? How many are forgoing care or going into debt to pay for
7 The statistics cited were taken from the Census Bureau website and Census Table Creator: http://www.census.gov/hhes/www/cpstables/032011/health/toc.htm. In the P60 reports, the Census Bureau only reports the relationship between income and insurance coverage, not poverty status.
8 The definition of poverty used in these statistics is the current official poverty definition, not the SPM definition reflecting the 1995 panel’s recommendations.