and the latter in measuring income and poverty. More specifically, within HHS, several agencies would be important to successful implementation: the Office of the Assistant Secretary for Planning and Evaluation, given its current work on poverty thresholds and history of working closely with the U.S. Census Bureau on poverty measures; the Agency for Healthcare Research and Quality, given its expertise and responsibility for the Medical Expenditure Panel Survey; and the National Center for Health Statistics, as the federal government’s principal agency for health statistics. Within the Commerce Department, the Census Bureau, because it conducts the Current Population Survey (CPS) and has accomplished extensive work on poverty measures, should clearly be involved.

The Office of Management and Budget (OMB), specifically its Statistical Policy Office, also needs to be involved, given that its predecessor issued the directive in 1969 establishing the official poverty measure, as well as the major role played by the chief statistician in the development of the Supplemental Poverty Measure (SPM), including co-chairing the Interagency Technical Working Group.

As explained in the report, the U.S. poverty measure is an important indicator of economic well-being that influences public opinion and public policies. Looking at its history, the current official poverty measure, developed in the early 1960s, is long outdated. Over the years, social and economic conditions changed along with changes in public policies and an overall increase in the standard of living, making the measure less adequate for its intended uses. The measure no longer provides an accurate picture of the extent of economic poverty, the differences among population groups and geographic areas, or the differences over time. The measure has weaknesses both in the definition of family resources and in the concepts of the thresholds. In particular, it does not take into account dramatic increases and variations in medical care spending, out-of-pocket costs, and health insurance coverage.

A congressionally mandated panel of the National Research Council (NRC) issued a report in 1995 that proposed a revised measure of poverty and recommended that the federal government develop a separate measure of medical care risk that would measure the economic risk to families and individuals of lacking adequate health insurance coverage (National Research Council, 1995). Much research has been conducted on different elements of the NRC-proposed poverty measure, leading, after many years, to the release of the new SPM in 2011. Much less work has been done on a potential measure of medical care economic risk. The passage of the Affordable Care Act and changes in other health care programs have made it important to revisit the conceptual and measurement issues for assessing medical care economic risk (a prospective measure) and medical care economic burden and to develop a useful measure for policy analysis and

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