1. Medical Expenditure Burdens: The Impact of Tax Subsidies, Within-Year Expenditure Concentration, and More Thomas M. Selden Division of Modeling & Simulation Center for Financing, Access and Cost Trends

2. Why Study Burdens? Most families healthy in given year Most families healthy in given year Illness, however, is a fact of life Illness, however, is a fact of life Medical bills pour in just when families must grapple with illness, seeking care, care-giving, and possibility reduced earnings Medical bills pour in just when families must grapple with illness, seeking care, care-giving, and possibility reduced earnings Accurate burden measurement a key ingredient for sound public policy Accurate burden measurement a key ingredient for sound public policy

3. Data Medical Expenditure Panel Survey (03&04) Medical Expenditure Panel Survey (03&04) <65 population <65 population – Medicare Part D

4. Conventional 20% Burden Measures (OOP Care + OOP Prem >.2*Y Disp ) *Essentially same as Banthin&Bernard (JAMA 06) 7.3 20.9

5. Annual 20% Burdens vs. Self-Reported “Bill Problems” Adults Age 19-64 in 2003

6. “Bill Problem” Responses Might Reflect Lower Thresholds

7. 3 Refinements Impact of tax subsidies Impact of tax subsidies Intra-year burdens Intra-year burdens Burden of uncompensated care Burden of uncompensated care None previously studied None previously studied

8. Impact of Tax Subsidy

9. Summary Tax subsidies modestly reduce burdens Tax subsidies modestly reduce burdens – Especially subsidies for premiums Lowers burden prevalence (7.3% to 6.2%) Lowers burden prevalence (7.3% to 6.2%) Little benefit for poor Little benefit for poor

10. The Impact of Within-Year Expenditure Concentration

11. Within-Year Family Expenditure Concentration Note: Families with zero expenditures excluded

12. Peak Month as Percentage of Annual Total, by Poverty and Expenditure

13. Intra-year Burdens? Precautionary savings are low Precautionary savings are low – 24% of bottom quintile have no liquid assets – Median among those with assets=$600 Earnings down when expenditures spike Earnings down when expenditures spike – Expenditure spikes play larger role

14. Within-Year Burdens (20%) 6.3 15.5 25.7 36.3 42.7 1.1 20.5

15. Burden of Uncompensated Care

16. Uncompensated Care CWF “bill problem” includes inability to pay CWF “bill problem” includes inability to pay UC can indeed be burdensome UC can indeed be burdensome – Medical debt – Credit problems – Access problems – Stigma – All ignored by conventional burden analyses Not observed, but… Not observed, but… – WTP(avoid UC burden) < UC

17. Bounding 20% Annual Burdens for Uncompensated Care

18. Monthly Burdens (20%)

19. UC Conclusions Modest increase in prevalence Modest increase in prevalence – Families “pay until it hurts” Concentrated among poor Concentrated among poor Importance of measuring medical debt Importance of measuring medical debt Monthly UC-adjusted burdens approach “bill problem” frequency Monthly UC-adjusted burdens approach “bill problem” frequency – 29% versus 32% among adults in 2003

20. Conclusions Tax subsidies modestly reduce burdens Tax subsidies modestly reduce burdens – Mostly among middle income Narrowing “budget window” increases burden prevalence, especially among poor Narrowing “budget window” increases burden prevalence, especially among poor UC modestly increases burden prevalence, again mostly among poor UC modestly increases burden prevalence, again mostly among poor Refinements greatly increase regressivity Refinements greatly increase regressivity

21. Type of Service Distribution in High-Burden Month *Conditional on having 20% burden