Medical Care Economic Risk Measuring Financial Vulnerability from Spending on Medical Care (2012) / Chapter Skim
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4 Issues in the Development of Thresholds
4 Issues in the Development of Thresholds
Pages 155-174
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From page 155... ...
How to capture variability of risk across populations, including geographic variations in exposure to medical care economic risk, and vulnerability of population groups by insurance status, age, income, chronic health conditions? How to update the thresholds?
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From page 156... ...
The Insurance Affordability Programs that will be available under the ACA beginning in 2014 -- Medicaid, the Children's Health Insurance Program, the basic health plan, premium tax credits, and the cost-sharing protections for qualified health plans in the exchanges -- will go a long way toward reversing the trends on underinsurance and on the uninsured, particularly for people with incomes under 250 percent of poverty for whom the protections are the greatest. But even for higher income households, the limits on out-of-pocket spending, market reforms against underwriting the essential benefit package, and guaranteed issue and no preexisting condition exclusions will also offer new protections.
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From page 157... ...
Collins briefly explained the data and method used in the analysis she conducted with Bhaven Sampat, Cathy Schoen, and Nicholas Tilipman, from Columbia University. They used the new out-of-pocket spending measure in the 2010 CPS to analyze out-of-pocket cost burden at the household/family level, also using a measure of family income.
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From page 158... ...
It shows a combination of low income and also poor coverage options at that income level, less employer coverage among low-income groups, and people in employer plans with high cost-sharing relative to lower paying jobs. Collins observed that a big advantage of the 2010 data is being able to look at differences across states in medical care cost spending.
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From page 159... ...
High out-of-pocket costs varied dramatically by state, ranging from 12 to 24 percent of families. Collins observed that the ACA reforms beginning in 2014, with Medicaid expansion, premium tax credits, and lower cost sharingfor qualified health plans in the exchanges, the essential benefit package, and market reforms, should lead to a dramatic reduction in the share of families with high out-of-pocket costs as a share of their income both nationally and across states.
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From page 160... ...
Health Insurance Coverage by Health Conditions Using the conditions file and coding by the International Classification of Diseases, ninth revision (ICD-9) , and the clinical classification codes that are in the MEPS, nonelderly adults were classified on the basis of their insurance status, whether they had any reported conditions during the year, whether they had acute conditions only, and whether they reported one, two, or three or more chronic conditions.
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From page 161... ...
One conclusion that can be drawn from these findings is that there tends to be a pretty systematic break for people with three or more chronic conditions compared with people with fewer chronic conditions, resulting in a level of seriousness, or intensity of service use, that leads to greater out-of-pocket spending. Trends in High Financial Burden Analysis of MEPS data for 2001, 2006, and 2008 shows that, across all condition categories, between 2001 and 2006 there was an increase in the percentage of people with high financial burden, defined as total out-ofpocket spending greater than 10 percent of family income.
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From page 162... ...
But if that happens again and again because of a chronic condition, that can become financially burdensome over time. Problems Paying Medical Bills Analysis of data from the 2007 Health Tracking Household Survey conducted at the Center for Studying Health Systems Change shows that a higher percentage of people with chronic conditions tended to report more problems paying medical bills, probably due in part to the persistence of high medical cost burdens as well as higher debt levels.
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From page 163... ...
focused mostly on employersponsored health insurance and some on nongroup health insurance, where the out-of-pocket expense risks are and how that has changed or not changed over time. He explained that most of the information is from a survey conducted at the Kaiser Family Foundation with the Health Research and Education Trust, but also some data from MEPS, looking at group and nongroup out-of-pocket shares.
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From page 164... ...
There seems to be a trend in that direction: for family coverage, small firms seem to be moving away from large firms and having less comprehensive coverage. Claxton reported that Kaiser Family Foundation started conducting a survey with the Health Research and Education Trust in 1999 to look at the dollar amount of worker contributions over time for single and family contributions by firm size.
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From page 165... ...
For family coverage in small firms, around 30 to almost 36 percent of covered workers in small firms contributed at least 50 percent of premium. That helps explain why there is a lower percentage of workers taking family coverage in small firms.
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From page 166... ...
Health reform may or may not help with some of these things. There will be an essential benefit package, potentially, but how much it will deal with the scope and duration limits that insurers are allowed in the benefit package is unknown.
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From page 167... ...
Choosing a fixed line might improve cross-state comparisons. Given the salience of the measure of medical care economic risk to the Supplemental Poverty Measure (SPM)
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From page 168... ...
Claxton presented interesting trends based on firm size and ownership, looking more at family versus single type firms. If the measure of medical care risk is to be prospective, then it suggests that a model is going to need to incorporate something about chronic conditions, firm size, and perhaps self-employment status, to address what type of economic risk an individual is going to face.
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From page 169... ...
directed his comments to Cunningham. He found the presentation quite informative, showing what one would expect in terms of moving from no conditions to acute conditions to multiple chronic conditions and using family income and family out-of-pocket expenditures.
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From page 170... ...
Many times the owners of very small firms -- with fewer than 20 workers, and in some cases fewer than 10 -- said that they contributed a certain percentage toward single coverage, which could be 50 or 100 percent, but they contributed nothing in addition for family coverage. Thesia Garner expressed concern about different references to measures.
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From page 171... ...
made a similar comment, stating that it seemed like the entire session addressed a range of factors that affect the likelihood of incurring high medical care economic risk, some of which are perhaps more appropriate for applying in a policy analytic sense, and others not. She said that although Ziliak treated them all as threshold issues, she was not sure, for example, that labor category is a threshold issue, even though job type has a lot to do with the ultimate risk of both expenses and debt.
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From page 172... ...
Did they become poor just because of medical care? Claxton responded that depending on some of the health reform decisions and what packages people get -- particularly in the nongroup insurance market, in which the risk is the largest because the policies are the shabbiest -- one might be able to say something prospectively about the insurance if the essential benefit package does not have a lot of limits.
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From page 173... ...
ISSUES IN THE DEVELOPMENT OF THRESHOLDS 173 should be thoughtfully contrasted with a different approach, which would use a relative threshold or a relative burden as opposed to a more absolute standard, which would say that a high burden is when out-of-pocket spending on medical care and/or premiums drops you below that subsistence level. That approach is more embedded in the SPM.
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