Association for Public Policy Analysis & Management

Incorporating health care needs and health insurance benefits into poverty measurement has long bedeviled and created controversy among poverty scholars. Recently, the 2019 National Academy of Sciences Committee Report, A Roadmap to Reducing Child Poverty, recommended that US Government agencies (BLS, Census, HHS and OMB) “move expeditiously to evaluate a health-inclusive poverty measure (HIPM).” We developed the HIPM, a modification of the Supplemental Poverty Measure (SPM), and used it to estimate impacts of health insurance benefits (Korenman and Remler 2016, Remler, Korenman and Hyson 2017).

We discuss the importance of incorporating Medicaid and other health insurance benefits in poverty measures. We analyze the intrinsic difficulties of accounting for health insurance benefits, relative to other benefits, including the issue of consistency with the needs threshold.

We analyze the advantages and disadvantages of various past approaches: Official Poverty Measure (OPM); OPM with various approaches to health insurance values in resources; Supplemental Poverty Measure (SPM); Using medical out-of-pocket (MOOP) expenditures in the threshold; Medical Care Expenditure Risk (MCER) Index; Willingness to Pay (WTP) for Medicaid. We compare and contrast those approaches with the Health-Inclusive Poverty Measure. We demonstrate the use of a HIPM, which is a modification of the SPM, to assess the impact of Medicaid on Health-Inclusive Poverty in a variety of contexts. While we discuss all health insurance benefits, including employer sponsored health insurance, we focus particularly on Medicaid.