which the U.S. Census Bureau first published in November 2011 and will update annually. Analyses of the effects of including and excluding certain factors from the new SPM showed that, were it not for the cost that families incurred for premiums and other medical expenses not covered by health insurance, 10 million fewer people would have been poor according to the SPM, and the SPM poverty rate in 2010 would have been 3 percentage points lower (Short, 2011:Table 3a).

Yet, although the SPM subtracts out-of-pocket medical care costs in the calculation of disposable income, it does not directly measure the burden of out-of-pocket medical care expenses nor does it address the medical care economic risk to the population in terms of the adequacy of their health insurance coverage to pay for their expected health care needs. The implementation of the Affordable Care Act (ACA) provides a strong impetus to think rigorously about ways to measure medical care economic burden and risk. As new policies—whether part of the ACA or other policies—are implemented that seek to expand and improve health insurance coverage and to protect against the high costs of medical care relative to income, such measures will be important to assess the effects of policy changes in both the short and the long term on the extent of financial burden and risk for the population.


The U.S. Department of Health and Human Services (HHS) is responsible for carrying out the provisions of the ACA, which is intended to extend health insurance coverage to most Americans. To monitor the effectiveness of health care reform in reducing out-of-pocket medical care expenses for low-income families and children, HHS can make use of the new SPM, but the SPM does not fully address the medical care risk to the population in terms of the adequacy of their health insurance coverage to pay for their expected health care needs. HHS would also find useful a companion measure of medical care economic risk (MCER), which estimates the proportion of families and children who are at risk of incurring high out-of-pocket medical care expenses, including health insurance premiums, in relation to their resources. Such a measure would enable HHS to answer such questions as which groups face a greater likelihood of economic insecurity due to lack of or inadequate health insurance coverage.

In fall 2010, the Office of the Assistant Secretary for Planning and Evaluation in HHS requested the National Academies to convene an ad hoc panel of experts to

organize, commission papers for, and conduct a public workshop to critically examine the state of the science in the development and implementation of a new measure of medical care risk as a companion measure

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