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Cover of Medical Care Economic Risk

Medical Care Economic Risk

Measuring Financial Vulnerability from Spending on Medical Care

Editors: Michael J. O'Grady and Gooloo S. Wunderlich. Authors: ; ; ; ; ; .

Washington (DC): National Academies Press (US); .
ISBN-13: 978-0-309-26604-8ISBN-10: 0-309-26604-1

The United States has seen major advances in medical care during the past decades, but access to care at an affordable cost is not universal. Many Americans lack health care insurance of any kind, and many others with insurance are nonetheless exposed to financial risk because of high premiums, deductibles, co-pays, limits on insurance payments, and uncovered services. One might expect that the U.S. poverty measure would capture these financial effects and trends in them over time. Yet the current official poverty measure developed in the early 1960s does not take into account significant increases and variations in medical care costs, insurance coverage, out-of-pocket spending, and the financial burden imposed on families and individuals. Although medical costs consume a growing share of family and national income and studies regularly document high rates of medical financial stress and debt, the current poverty measure does not capture the consequences for families' economic security or their income available for other basic needs.

In 1995, a panel of the National Research Council (NRC) recommended a new poverty measure, which compares families' disposable income to poverty thresholds based on current spending for food, clothing, shelter, utilities, and a little more. The panel's recommendations stimulated extensive collaborative research involving several government agencies on experimental poverty measures that led to a new research Supplemental Poverty Measure (SPM), which the U.S. Census Bureau first published in November 2011 and will update annually. Analyses of the effects of including and excluding certain factors from the new SPM showed that, were it not for the cost that families incurred for premiums and other medical expenses not covered by health insurance, 10 million fewer people would have been poor according to the SPM.

The implementation of the patient Protection and Affordable Care Act (ACA) provides a strong impetus to think rigorously about ways to measure medical care economic burden and risk, which is the basis for Medical Care Economic Risk. As new policies - whether part of the ACA or other policies - are implemented that seek to expand and improve health insurance coverage and to protect against the high costs of medical care relative to income, such measures will be important to assess the effects of policy changes in both the short and long term on the extent of financial burden and risk for the population, which are explained in this report.

Contents

This study was supported by Contract/Grant No. HHSP23320042509XI, TO#39 between the National Academy of Sciences and the U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation. Support for the work of the Committee on National Statistics is provided by a consortium of federal agencies through a grant from the National Science Foundation (award number SES-1024012). Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.

Suggested citation:

National Research Council and Institute of Medicine. (2012). Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Panel on Measuring Medical Care Risk in Conjunction with the New Supplemental Income Poverty Measure, M.J. O'Grady and G.S. Wunderlich, Eds. Committee on National Statistics, Division of Behavioral and Social Sciences and Education, and Board on Health Care Services, Institute of Medicine. Washington, DC: The National Academies Press.

NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

Copyright 2012 by the National Academy of Sciences. All rights reserved.
Bookshelf ID: NBK206830PMID: 24901194DOI: 10.17226/13525

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