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Calculating Fungible Values: Medicare, Medicaid

Starting with the 2015 ASEC, the Census Bureau will no longer include variables related to fungible values of Medicare and Medicaid on the ASEC public use file. Due to security concerns, the Center for Medicaid and Medicare Services has limited the availability of data used to update the market value of Medicaid. Therefore, we are unable to update the following variables: FFNGCAID and P_MVCAID. FFNGCARE, P_MVCARE, FFOODREQ and FHOUSREQ will also not be included on the public use file, since they are only required for the computation of the fungible value variables. The information on this page is provided to help data users with calculating substitute values for these variables.

For information on the fungible value approach, see page 7 of this publication: //www.census.gov/hhes/www/poverty/prevcps/p60-186rd.pdf [PDF]

Two sets of data are necessary before the fungible values of Medicare and Medicaid can be calculated.

  1. Person-level data for the market value of Medicare and Medicaid, which will then need to be turned into family-level values of Medicare and Medicaid as applicable to each family-unit on the ASEC data file.
  2. Family-level data on the costs of food and housing

Market Values of Medicare and Medicaid Benefits

P_MVCARE – Person market value of Medicare

P_MVCAID – Person market value of Medicaid

The fungible values of Medicare and Medicaid are created using state-level data for the following groups:

Medicaid

  1. Blind/Disabled
  2. Children
  3. Adults

Medicare

  1. Blind/Disabled
  2. Elderly

The state-level data that were used to create the variables on the 2014 ASEC public use file are being made available for data users who are unable to locate the Medicare and/or Medicaid data in a different way. The data would need to be inflated to the data year of interest using the method described below.

2013 Medicare Fungible Data [XLSX - 36k]

2013 Medicaid Fungible Data [XLSX - 42k]

Alternatively, an outline of how to construct the person-level Medicare and Medicaid variables is below. Family-level variables are constructed by summing each person-level variable within a family as identified on the CPS ASEC file.

Medicare Calculations (P_MVCARE)

Obtain:

  1. annual enrollment figures and
  2. the annual amount of program payments by state

for Part A and/or Part B Medicare Services for each group under Medicare as well as the Total population.

Divide the Annual amount of program payments by the annual enrolment figures to calculate the mean Medicare outlays per enrollee.

The values are then updated using an inflation factor for the change in medical expenditures between the year of the data used and the year of interest. A national trend regarding expenditure increases can be found in the Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds in the table named “HI and SMI Average per Beneficiary Costs”. The most recent edition of the annual report can be found here: //www.cms.hhs.gov/ReportsTrustFunds. Calculate the percent growth between your data year and the year of interest from the table after summing the “HI” and “Part B” columns together. Use that growth rate to inflate your data as necessary.

Once you have the inflated values by state, add in the Part D net costs (expenditures – premiums) per enrollee which can be found using table “Operations of the Part D account in the SMI Trust Fund (Cash Basis)” and table “Medicare Enrollment” from the Trustees Report.

If a person record indicates Medicare coverage, then the Medicare market value is assigned to that record.

Medicaid Calculations (P_MVCAID)

Obtain amounts for the total Medicaid payments and the total number of Medicaid unique eligibles who are (i) not medically needy, (ii) not classified as ICF/MR, and (iii) not receiving benefits for nursing facilities services.

Obtain data on the expenditures and number of enrollees for unique beneficiaries (excluding institutionalized person and the medically needy) by state for each group mentioned under Medicaid above, as well as the Total population.

Divide the total expenditures by the Unique Eligibles to calculate mean Medicaid outlays. The Medicaid values are then inflated to the year of interest in the same way that the Medicare data are inflated. National estimates are available in the “Actuarial Report on the Financial Outlook for Medicaid” using table “National Mean Medicaid Outlays per Unique Eligible by Risk Class”.

If a person record indicates that they have Medicaid coverage, then the Medicaid market value is assigned to that record.

Food and Housing Costs

FFOODREQ – Used to define the family value of food requirements

FHOUSEREQ – Used to define the family value of housing requirements

To calculate the fungible values, data users also need to merge onto the ASEC data file the value of the Thrifty Food Plan (FFOODREQ) for each family on the file and the two-bedroom average Fair Market Rent (FMR) (FHOUSEREQ) for the number of bedrooms assigned to that family.

Food Plan Costs (FFOODREQ)

Values for the Thrifty Food plan are obtained from the USDA “Food Plans: Cost of Food” report, which can be found here: //www.cnpp.usda.gov/USDAFoodPlansCostofFood/reports

Data users can either average across the 12 month reports for a data year, or use the value in the July 1 report.

Housing Costs (FHOUSEREQ)

The Fair Market Rent data is obtained from the Department of Housing and Urban Development://www.huduser.org/portal/datasets/fmr.html

Use the national average Fair Market Rent for units with 0 to 5 bedrooms weighted by population counts. The number of bedrooms for each family record on the ASEC file is identified by the variable “num_brms”.

Fungible Value Calculations

FFNGCAID – Family fungible value of Medicaid

FFNGCARE – Family fungible value of Medicare

Once the costs of food and housing have been obtained for each family, they are summed together. The total market value of Medicare and Medicaid for each family is also calculated. (NOTE: Not all families will have values for Medicare and/or Medicaid.)

If the annual cash income of the family (includes earnings, food stamps and housing subsidy) is less than the sum of the food and housing costs, then the fungible values are set to $0.

If the annual cash income of the family (includes earnings, food stamps and housing subsidy) is greater than the combined sums of food/housing costs plus the total family Medicare/Medicaid market values, then the fungible value is equal to the respective market value (FFNGCAID = Total Family Cost of Medicaid; FFNGCARE=Total Family Cost of Medicare)

If the annual cash income of the family (includes earnings, food stamps and housing subsidy) is greater than the sum of the food and housing costs, but less than the combined sum of food/housing costs plus Medicare/Medicaid market values, then the fungible value is equal to the “excess” income above the costs of the food and housing. The value is prorated based on the sum of family members’ market value for Medicare or Medicaid as appropriate.

Family Fungible Value =[ (total annual income – total food and housing costs) *Total Family Cost of Medicare/Medicaid]/Total Family Cost of Medicare/Medicaid

For those families with both Medicaid and Medicare, the “excess” income is prorated across the two programs.

Family Fungible Value =[ (total annual income – total food and housing costs) *Total Family Cost of Medicare/Medicaid]/Total Family Cost of Medicare and Medicaid.

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