Medical Out of Pocket Expenditures and Poverty: A Cross-Country Analysis

Alice Zulkarnain, CUNY Institute for Demographic Research (CIDR) and Graduate Center, City University of New York (CUNY)

Recently, the Census Bureau introduced the Supplemental Poverty Measure (SPM), which, following NAS recommendations, subtracts Medical-Out-Of-Pocket Expenditures (MOOP) from income, under the assumption that MOOP expenditures are non-discretionary. However, MOOP expenditures may be partly discretionary, so subtracting MOOP from income may classify people with unmeasured wealth or strong preferences for medical care as poor, particularly the elderly, raising validity concerns (Korenman and Remler, 2013). In this paper, I extend the SPM practice of subtracting MOOP from income to countries with universal health care systems using data for Canada and France (LIS), and the USA (CPS). I hypothesize that, if MOOP is largely non-discretionary, then in countries with universal health systems, MOOP expenditures should be lower and more responsive to economic variables. Preliminary results show that MOOP is highly sensitive to income in all countries and that the elderly are most affected. Future analyses will include the UK, Italy and Switzerland.