Why Study Burdens?
Medical Expenditure Burdens: The Impact
of Tax Subsidies, WithinWithin-Year Expenditure
Concentration, and More
Thomas M. Selden
Division of Modeling & Simulation
Center for Financing, Access and Cost Trends
„
„
„
Most families healthy in given year
Illness, however, is a fact of life
Medical bills pour in just when families
must grapple with illness, seeking care,
carecare-giving, and possibility reduced
earnings
„ Accurate burden measurement a key
ingredient for sound public policy
Conventional 20% Burden Measures
(OOPCare + OOPPrem > .2*Y
.2*YDisp)
Data
„ Medical Expenditure Panel Survey (03&04)
25
20.9
% of Population
„ <65 population
– Medicare Part D
All
20
0-100
100-200
200-300
300-400
400-600
>600
15
10
7.3
5
0
Poverty Level
*Essentially same as Banthin&Bernard (JAMA 06)
“Bill Problem”
Problem” Responses Might
Reflect Lower Thresholds
Annual 20% Burdens vs. SelfSelf-Reported
“Bill Problems”
Problems”
% of Pop .
% of Population .
Adults Age 1919-64 in 2003
50
45
40
35
30
25
20
15
10
5
0
MEPS
>20% Burden
Commonwealth
Fund
"Bill Problems"
50
45
40
35
30
25
20
15
10
5
0
MEPS
>40%
>15%
>5/10%
>20%
>10%
>5%
"Bill Problem"
1
3 Refinements
„ Impact of tax subsidies
„ IntraIntra-year burdens
Impact of Tax Subsidy
„ Burden of uncompensated care
„ None previously studied
Summary
„ Tax subsidies modestly reduce burdens
– Especially subsidies for premiums
The Impact of WithinWithin-Year Expenditure
Concentration
„ Lowers burden prevalence (7.3% to 6.2%)
„ Little benefit for poor
Peak Month as Percentage of Annual
Total, by Poverty and Expenditure
% of Total
40
30
20
70
60
50
40
30
20
10
0
% of Total
50
3
4
5
6
7
8
9 10 11 12
Total
Out-of-Pocket
0K
>1
2
0K
-1
5K
1
K
-5
1K
Poverty Level
0
70
60
50
40
30
20
10
0
K
<1
10
00
>6
0
60
040
0
40
030
0
30
020
0
20
010
00
<1
% of Annual Total .
WithinWithin-Year Family Expenditure
Concentration
Total Expenditure
Total
Out-of-Pocket
Ranked Months
Total
Out-of-Pocket
Note: Families with zero expenditures excluded
2
„ Precautionary savings are low
– 24% of bottom quintile have no liquid
assets
– Median among those with assets=$600
„ Earnings down when expenditures spike
WithinWithin-Year Burdens (20%)
% of Population .
IntraIntra-year Burdens?
50
45
40
35
30
25
20
15
10
5
0
42.7
36.3
25.7
20.5
15.5
6.3
1.1
ll
00
>6
0
60
040 0
40
030 0
30
020
0
20
010
0
10
0-
A
– Expenditure spikes play larger role
Annual
Quarterly
Monthly
Uncompensated Care
„ CWF “bill problem”
problem” includes inability to pay
„ UC can indeed be burdensome
Burden of Uncompensated Care
Medical debt
Credit problems
Access problems
Stigma
– All ignored by conventional burden analyses
–
–
–
–
„ Not observed, but…
but…
– WTP(avoid
WTP(avoid UC burden) < UC
Monthly Burdens (20%)
30
60
25
50
20
Upper Bound
Lower Bound
15
10
5
0
% of Population
% of Population
Bounding 20% Annual Burdens
for Uncompensated Care
40
Upper Bound
Lower Bound
30
20
10
0
LL
00
>6 00
6
040 400
030 300
020 00
2
010
00
<1
A
LL
00
>6 00
6
040 400
030 300
020 00
2
010
00
<1
A
3
UC Conclusions
„ Modest increase in prevalence
– Families “pay until it hurts”
hurts”
„ Concentrated among poor
„ Importance of measuring medical debt
„ Monthly UCUC-adjusted burdens approach
“bill problem”
problem” frequency
– 29% versus 32% among adults in 2003
Conclusions
„ Tax subsidies modestly reduce burdens
– Mostly among middle income
„ Narrowing “budget window”
window” increases burden
prevalence, especially among poor
„ UC modestly increases burden prevalence,
again mostly among poor
„ Refinements greatly increase regressivity
Type of Service Distribution in
HighHigh-Burden Month
100%
80%
HOSP
ER
AMB&OTH
DENT
RX
PREMIUM
60%
40%
20%
0%
00
>6 00
6
040 00
4
030 00
3
020 00
2
010
00
<1
LL
A
*Conditional on having 20% burden
4