Medical Care Economic Risk Measuring Financial Vulnerability from Spending on Medical Care (2012) / Chapter Skim
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Incorporating Data on Assets into Measures of Financial Burdens of Health--Jessica S. Banthin and Didem Bernard
Incorporating Data on Assets into Measures of Financial Burdens of Health--Jessica S. Banthin and Didem Bernard
Pages 267-280
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From page 267... ...
Similarly, assets are likely to serve as an important financial resource for families with high out-of-pocket medical expenses, especially in the case of unexpected medical expenses. If asset holdings are generally correlated with income, then ignoring assets in measures of poverty or out-of-pocket burdens for health care may not result in biased or misleading comparisons between population subgroups.
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From page 268... ...
This issue may be particularly relevant to the measurement of medical care burdens, because health care expenses due to illness and disability are widely recognized as one of the major financial risks of old age for which to save. The question then becomes one of how to incorporate assets into an income-based measure.
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From page 269... ...
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. PRIOR LITERATURE ON HEALTH CARE BURDENS In a previous study, we estimated changes in annual financial out-ofpocket burdens for medical care, for the population under age 65 (Banthin and Bernard, 2006)
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From page 270... ...
The implication of these different consumption and saving patterns is that elderly and nonelderly families would be expected to devote different shares of family income to out-of-pocket medical care and health insurance premiums. DATA AND METHODS Using the Medical Expenditure Panel Survey The Medical Expenditure Panel Survey (MEPS)
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From page 271... ...
Construction of Measures of Out-of-Pocket Burden For this analysis, we rely on the same approach we have refined in several previous papers to calculate financial out-of-pocket burden for medical care. We define out-of-pocket burden for medical care as a family-level concept in the same way that poverty is a family-level concept, because in both measures it is assumed that family-level resources are shared among individual family members.
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From page 272... ...
As expected, younger families devoted a much smaller share of family income to medical care. Among those living in poverty, the elderly spent about 13.5 percent of family income on medical care, whereas the nonelderly spent about 2.7 percent of family income.
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From page 273... ...
In the column labeled BURD10, we show the percentage of families who were spending 10 percent or more of family income on medical care. Overall, about 52 percent of elderly and 17 percent of nonelderly families had high burdens according to this threshold.
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From page 274... ...
(52,333) N 17,513 3,260 3,849 5,190 5,214 Elderly Health Insurance Eligibility Units 10 –8 –63 –18 17 7,788 (3)
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From page 275... ...
ADJINC = adjusted income (dollars) ; BURD10 = percentage of families who were spending 10 percent or more of family income on medical care; BURD20 = percentage of families who were spending 20 percent or more on medical care; BURD10ADJ = percentage of elderly families with high out-of-pocket burdens; BURD20ADJ = percentage of families with high burdens; TOTINC = total adjusted income (dollars)
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From page 276... ...
It could be argued that nonelderly family income should be reduced in order to account for such saving. Another difference worth mentioning is that working-age families face tax penalties if they use tax-sheltered assets, such as retirement accounts, for current health care expenses.
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From page 277... ...
Combining these approaches, we show in Table A-3 that about 16.5 percent of elderly families have medical care burdens exceeding 20 percent of adjusted income compared with about 17.0 percent of nonelderly families with medical care burdens exceeding 10 percent of reported income. Based on the very different distribution of burdens, this method is also worth considering.
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From page 278... ...
It is not clear that any special measurement procedures are needed to account for the health care burdens faced by this group, although a narrower definition of self-employment might reach different conclusions. ANNEX TABLE A-1 Percentiles (PCTs)
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From page 279... ...
SOURCE: Medical Expenditure Panel Survey -- Household Component, Panels 10-12.
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From page 280... ...
Medical Care 41(7 Supp.)
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