would be an acceptable level of expenditures for people, even those in the CHIP program, for example.

The RAND study also used this lower threshold to reflect income that barely covered essentials and also lacked assets and savings among lower income families, she said. Clearly the ACA incorporates a sliding scale measure of both premium affordability standards and cost-sharing.

On the issue of what the affordability threshold should be, Cunningham observed that he did not think that anybody really knows from a strictly empirical basis at which point health care becomes affordable or unaffordable. That has been defined in a lot of different ways.

A lot of the work has used a more normative approach, looking at a moderate- to high-income group to see what their spending is. This means, in effect, looking at various percentile distributions that should be defined as what is affordable. He said he is not completely comfortable with that because of the way a lot of out-of-pocket spending works in health care, especially if there are unexpected costs, such as a need to go to the hospital or a need to get a procedure done. People cannot always adjust their spending based on what they can afford. They get the care that they need at the time they need it, and they deal with the bills later—and that is when medical debt issues come up. There is also the issue of whether affordability should be based on necessary versus unnecessary costs. And nobody really knows exactly what those are, either.

There is also some justification for using a lower threshold for low income, he said. In fact, in the CHIP program, a 5 percent threshold is used; any out-of-pocket costs cannot exceed 5 percent—so there is some justification or rationale. At this time, the threshold that is used, whether it is 5 percent, 10 percent, or some in between, is fairly arbitrary.

Steven Cohen (Agency for Healthcare Research and Quality) 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. He suggested that individuals with no conditions probably are in families with people with three or more conditions, if one did the analysis in which the context was at the person level, so they are carrying that risk. Likewise, people at the high end with three or more conditions are carrying individuals with no conditions. There would be a more dramatic step up if one did the analysis by family size. He asked Cunningham if he did that, what kind of tail ends of the burden estimates would he see.

Cunningham responded that he did not analyze the data by family size. He did separate it out by self only versus family plan to get an idea of what the individual spending is. But the family spending is driven by people with health problems, and it is not the case that people with health problems

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