Healthcare systems and practices

Healthcare

Assessing the Effect of Tax Subsidies on High Healthcare Expenditure Burdens in the United States

Using the data sets from the Household Component of Medical Expenditure Panel Survey (MEPS) a representative range of health expenditure burdens of families with exceptionally high medical expenses has been used as the basis of this analysis. The impact of tax subsidies on nonelderly families who have traditionally had high medical expenses is the primary research area of interest (Selden, 2008).

While the United States has a myriad of public and private health insurance programs and financial aid programs for those needing healthcare yet cannot afford it due to their relative income levels and poverty levels, age, insurance coverage, the role of tax subsidies has yet to be empirically measured. As a result, from a measurement perspective, failure to account for tax subsidies will lead researchers to overstate high expenditure burdens (Selden, 2008). The study seeks to determine if tax subsidies in fact contribute to mitigating exceptional expenses of those uninsured families below the poverty line, at the poverty line, and quartiles above it.

Data Sources and Data Description

The data sets used by the authors are taken from Household Component of Medical Expenditure Panel Survey (MEPS), a longitudinal data set specifically designed to track healthcare spending by families, their demographics, the levels of expense burden by family, its specific amount, and the payment methods. This database also includes the combination of publically-funded and tax-funded programs that are relied on for paying for medical coverage.

Methodology

The researchers' methodology centers on the hypothesis of tax expenditures over time alleviating the burdens of exceptionally high medical costs for low-income families. A series of statistical models are developed and constraints defined which serve as the framework for evaluating the Household Component of Medical Expenditure Panel Survey (MEPS) data. The statistical models are based on evaluating out-of-pocket expenditures on care (M1) family out of pocket spending on insurance premiums (M2) and employer premium contributions (M3) (Selden, 2008). These constants are then used for creating probability measures of program performance to further evaluate the impact of tax-based subsidies on the ability of lower-income families to better afford healthcare. The modeling process seeks to address the longitudinal aspects of the data included in the Household Component of Medical Expenditure Panel Survey (MEPS) by defining time series analyses constraints as well. Through the use of statistical modeling the researcher was able to arrive at the validation of their hypothesis.

Assessment of Research Findings

Based on the results of the statistical modeling used in conjunction with the Household Component of Medical Expenditure Panel Survey (MEPS) data set, it was found that tax subsidies do not have a differentially large or targeted effect on the prevalence of high burdens (Selden, 2008). Selden (2008) defines burdens as cash and wage equivalents of employer premium contributions. The results show that tax subsidies assist those above the poverty line more than those below it. The study is concluded prior to explaining why this is so, yet the author contends there are many other factors in addition to tax-based subsidies that have an impact on those below the poverty line being able to afford medical care even with tax-based subsidies.

Analysis