together in the paper. Hence they put forward the idea of modeling a probability distribution and then simply applying insurance characteristics and aggregating them.

Ziliak commented that one approach is weighting by family size, taking whatever family concept is selected and putting it at the individual level. But the CPS has individual-level data on earnings and income, and the insurance status is at the individual level, not the family level. So, he said, one can go fairly far with the individual level and then weight it up to the family.

Meier said that one is not trying to assign an individual a risk score or an expected value in the next year but instead recognizing that an individual at the start of a year has an entire spectrum of outcomes that could happen. The shape of that distribution and where it is centered is going to depend on initial health status. If someone has diabetes, one can be reasonably certain that it will increase expenditures. But the actual shape that falls around the mean value is what she meant in talking about modeling—looking at that shape, seeing what insurance does to the shape. Ideally, if there is an out-of-pocket maximum, it should just slice off the tail. And aggregating that upward to the family, instead of having an expected value of expenditures for a family in the next year, her vision is that a family actually has a risk distribution. From that distribution, one could come up with some understanding of how likely they are to be placed in poverty or to experience expenditures at 10 percent of their income. Tacking on the premium would show whether the premium itself put the family in poverty, before out-of-pocket expenditures are even factored in.

A participant commented about the discussion of the value of insurance in the context of a person who does not value the insurance, who has low income, and who now is forced to pay a premium and has therefore a lower amount of money available for everything else. That must be captured, he said, but there are also the benefits to other people of that person’s being insured. People who are insured have an opportunity for more efficiently provided health care. They can actually get their relatively minor issue treated much sooner and so skip the emergency room later on, when the situation is far worse. There is also the opportunity for the health system in general to be more efficient if more people are insured. It is not just the person who gets insurance who gains from having coverage or having better insurance. In terms of explaining the overall effect of some changes in health care policy, leaving that out very much understates the benefits of changes that add or improve the quality of insurance.

Collins commented that the protectiveness of the coverage is not just about getting sick or not. It is also the first dollar, coverage for kids, getting better health screening, and improvements for people with currently bad coverage.



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