particularly among the elderly, who may be depending in part on accumulated assets to offset the loss of earnings in retirement. We recommend that a portion of liquid assets be included in the resources of all persons, regardless of age or employment status except where restrictions on access may apply (as in retirement accounts). Although the panel finds the calculation of an annuitized value from the family’s liquid assets a compelling approach, we have not examined all the operational ramifications of adopting it, and thus we defer to those who are charged to implement a medical care economic risk measure. As to the choice between Census money income and disposable income, we recommend the use of disposable income, augmented by a portion of liquid assets, to facilitate comparisons with the SPM.
Recommendation 3-1: The panel recommends that the U.S. Census Bureau modify its concepts and measurement of money income and disposable income to better account for income flows from self-employment and from new forms of retirement income for use in measures of poverty and medical care economic risk and burden that are derived from its household surveys.
Recommendation 3-2: The panel recommends that, for measuring medical care economic risk, a portion of liquid assets be included in the resources of all persons, regardless of age or employment status. Only assets that the family or individual can access relatively quickly should be considered in determining the amount to be included—namely, financial assets held outside retirement accounts, the posttax value of assets held in retirement accounts, and, in principle, the amount potentially received from a reverse mortgage (treating it as income rather than as an asset), acknowledging the limitations of existing data.
Recommendation 3-3: The panel recommends that the method for calculating the share of liquid asset contribution to resources for measuring medical care economic risk be determined by the federal agency charged with producing the measures and that the methodology be based on one of two options—either a fixed share of assets or an annuitized value. The share of liquid asset contribution derived in this manner should be added to disposable income to provide the measure of resources for evaluating medical care economic risk.