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Comment by StephenSmith | Hacker News Reader

There's a lot of negativity in this thread and the title is very sensational. The point that should be highlighted in the article - "The bright side? That's an improvement from half of adults being unable to cover such an expense in 2013. The number has been ticking down each year since."

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The negativity in this thread is justified, and the headline is correct to highlight the darkly absurd desperation of the average citizen's situation. To attempt to look on the bright side here would be analogous to a commenter on a news article in 1918 saying "well, 50,000 people will die of Spanish flu this month, but let's look on the bright side: 75,000 people died last month!"

Furthermore, even the statistic that 40% of people can't cover a $400 expense is lowballing the severity of the situation, because who says that $400 is anywhere near the average financial cost of an unexpected emergency? What percentage of Americans can't cover a $500 expense (we know it's more than 40%)? What about a $1,000 emergency expense (which in my estimation is closer to the median deductible for a health insurance policy (assuming that one has health insurance in the first place))?

I wonder if that's tracked to inflation. A $400 medical expense from 2013 is likely closer to $500 today, which might account for the difference from 50% to 40%.

Inflation just hasn't been that high lately. $400 in 2013 dollars is $428.50 in 2018 dollars.

Inflation has been historically low recently https://tradingeconomics.com/united-states/inflation-cpi

The BLS calculator (https://www.bls.gov/data/inflation_calculator.htm) says $400 in 2013 is ~ $430 today. Seems unlikely to account for that much of the change.

Govt inflation numbers represent a portfolio consisting of all commodities in equal quantity. But if you hold a portfolio of iPhones, Toyotas, and etc (assuming they are non depreciating assets) that number would double very easily.

Government inflation numbers don't work like that at all. They are based on the Consumer Price Index, which uses a market basket of consumer goods and services.

https://www.bls.gov/cpi/

"Average price data for select utility, automotive fuel, and food items are also available."

All of these are commodities. And every single product derived is based on commodity. Most commodities can be traded on commodity markets.

Yes, but all of them being commodities (what I said) is not the same as inflation only being accurate when someone purchases every commodity available in the marketplace (what you said).

Thats exactly how asset managers construct a portfolio thats suppose to track inflation.

Inflation of a portfolio of iPhones is completely different than inflation that an average American pays due to cost of living changes in the economy. You're cherrypicking a hypothetical scenario that doesn't apply at all to the example at hand, which is the average person's ability to pay for emergencies that arise related to living expenses.

All I am saying is that $400 in 2013 is not worth $430 today, Its wort a LOT MORE! Stop arguing like a idiot.

doesnt this look like the chart of CPI https://finance.yahoo.com/chart/DBC

https://www.bls.gov/charts/consumer-price-index/consumer-pri...

Which includes blackbox modifiers like "hedonic adjustments". So if it costs you $800 to get a cast for your broken leg today as opposed to $400 a few years ago, but they claim the quality of the cast is twice as good, then they say there was 0% inflation as you are getting the same "value" even though its costing you twice as much to fix the same problem.

https://www.bls.gov/cpi/quality-adjustment/home.htm

According to that link you provided, hedonic adjustments don't apply to healthcare services.

Yeah that's not too big of a change. Medical expenses, at least measured by national health expenditure per capita, have grown about 17% since then [1]. An additional 17% on $400 would be ~ $468. That number could be enough to account for some of the difference. Of course, medical expenses are by no means the only type of emergency expense, and what you've said about inflation as a whole is still true.

1: https://www.statista.com/statistics/184955/us-national-healt...

Why does it seem unlikely? I don't know the shape of the distribution but it doesn't seem implausible to me that a 7.5% change in the threshold amount would correspond to a 10% change in the population quantile.

Sorry, but the recent inflation rate has been about 0-2% per year. A $400 medical expense in 2013 is about $430 today.

Medical expenses are going up much faster than inflation. At least 4% annually I think. Maybe as much as 6-8% on average since 2013? I see varying figures, but definitely not 0-2%.

Average increases in nationwide medical expenses and inflations' effect on the average household are completely separate issues because the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation's health care costs.

Source: https://www.thebalance.com/causes-of-rising-healthcare-costs...

The inflation of medical expenses in the US significantly outpaces the standard measures of inflation that you're quoting, generally by at least 3%. The OPs estimate of $500 is much closer to reality than yours.

See my reply here: https://news.ycombinator.com/item?id=17130287

Quoting a factoid about the distribution of actual medical _spending_ doesn't change the incorrectness of projecting CPI onto medical _costs_. There are indices - the BLS maintains one and a number of actuarial firms publish others - that track the costs of various medical services and they all outpace CPI.

You're right, there are a lot of factors at play here, its not a simple issue, and both myself and OP were somewhat oversimplifying things on opposing ends of the spectrum. My point though is that simply looking at the increase in the cost of medical services across the board is different than looking at how much the average American family is actually spending on medical costs year over year, and that is a key differentiation.

That should be expected somewhat however due to it likely being a lagging indicator of the economic recovery.

It's still pretty terrible it a) got to that point b) is still at this point.

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