An Updated Measure of Poverty (Re)Drawing the Line (2023) / Chapter Skim
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Appendix 3A: Alternative Approaches to Accounting for Medical Care in a Poverty Measure
Appendix 3A: Alternative Approaches to Accounting for Medical Care in a Poverty Measure
Pages 53-55
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From page 53... ...
spending is not deducted from resources. Thus, the OPM mostly ignores medical care, and changes in the OPM over time reflect neither increases in households' medical care cost burden nor any offsetting effects of public health insurance programs such as Medicare and Medicaid.
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From page 54... ...
However, like the SPM, the SPM-MIT is limited in its ability to capture the impact of any expansion of public health insurance programs on poverty; the SPM-MIT will capture such impacts only as far as they affect expected MOOP spending. Two-Index Measure: In 1995, the National Academies panel recommending the SPM wanted to include medical care in the measure of poverty but recognized multiple validity problems in doing so.
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From page 55... ...
As a result, over time, a growing health benefit far exceeds the threshold medical care need and is assumed available to meet nonmedical needs. This distortion of the FPM is the result of an interaction between absoluteness of the medical care need in the threshold and the fact that health insurance benefits are not truly fungible resources; and, over decades, the distortion can grow large.
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