Measuring Changes in Household Spending Burden Under Health Reform Proposals

Research Report

Measuring Changes in Household Spending Burden Under Health Reform Proposals


Issue: The potential impact of health reforms is usually measured by aggregate costs and effects on coverage, especially the number of uninsured. However, the estimated changes in federal costs could also potentially reflect large changes in household spending. Important impacts on financial burdens are not measured by modeling teams consistently and often get lost in debates over merits of proposals. Frequently, failing to measure the distributional impacts of policy changes on household health care financing burdens leaves critical benefits of new spending unknown.

Goal: Delineate measures of change in the distribution of household health care financial burdens that sophisticated microsimulation modeling teams, such as those of CBO, the Urban Institute, and RAND, could straightforwardly incorporate into their analyses of reform proposals.

Methods: Develop metrics to measure financial burden using the Urban Institute’s Health Insurance Policy Simulation Model and its underlying data. Display and test each metric using an illustrative reform.

Key Findings and Conclusions: We propose two standard objective measures of health care financial burdens that microsimulation modelers can regularly produce. We also contend that it is critical to accompany these measures with a third metric that estimates the change in total health care services under reform.

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