Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Hindustan Times points out high value of H-1B visas for US innovation, welfare, and tech firm profits

Novak, Geronimus, Martinez-Cardoso: Threat of deportation harmful to immigrants' health

Students from two worlds learn from one another in Morenoff's Inside-Out class

More News

Highlights

Heather Ann Thompson wins Pulitzer Prize for book on Attica uprising

Lam explores dimensions of the projected 4 billion increase in world population before 2100

ISR's Nick Prieur wins UMOR award for exceptional contribution to U-M's research mission

How effectively can these nations handle outside investments in health R&D?

More Highlights

Next Brown Bag

Mon, April 10, 2017, noon:
Elizabeth Bruch

The evolution of medical spending risk

Publication Abstract

Gruber, Jonathan H., and Helen Levy. 2009. "The evolution of medical spending risk." Journal of Economic Perspectives, 23(4): 25-48.

How has the economic risk of health spending changed over time for U.S. households? We describe trends in aggregate health spending in the United States and how private insurance markets and public insurance programs have changed over time. We then present evidence from Consumer Expenditure Survey microdata on how the distribution of household spending on health—that is, out-of-pocket payments for medical care plus the household's share of health insurance premiums—has changed over time. This distribution has shifted up over time—households spend more on medical care and insurance than they used to—but for the purposes of measuring change in risk, it is not the mean but the dispersion of this distribution that is of interest. We consider two measures of dispersion that serve as proxies for household risk: the standard deviation of the distribution of household health spending and the ratio of the 90th percentile of spending to the median (the so-called “90/50 gap”). We find, surprisingly, that neither has increased despite the rapid rise in aggregate health spending. This conclusion holds true for broad subgroups of the population (for example, the nonelderly as a group) but not for some narrowly-defined subgroups (for example, low-income families with children). We next consider how much risk households should face, from the perspective of economic efficiency. Household risk may not have changed much over the past several decades, but do we have any evidence that this level represents either too much or too little risk? Finally, we discuss implications for public policy—in particular, for current debates over expanding health insurance coverage to the uninsured.

Licensed Access Link

Country of focus: United States of America.

Browse | Search : All Pubs | Next