Working Paper: NBER ID: w19954
Authors: Silvia Helena Barcellos; Mireille Jacobson
Abstract: We estimate the current impact of Medicare on medical expenditure risk and financial strain. At age 65, out-of-pocket expenditures drop by 33% at the mean and 53% among the top 5% of spenders. The fraction of the population with out- of-pocket medical expenditures above income drops by more than half. Medical- related financial strain, such as problems paying bills, is dramatically reduced. Using a stylized expected utility framework, the gain from reducing out-of-pocket expenditures alone accounts for 18% of the social costs of financing Medicare. This calculation ignores the benefits of reduced financial strain and direct health improvements due to Medicare.
Keywords: No keywords provided
JEL Codes: I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Medicare (I18) | out-of-pocket expenditures (H51) |
| Medicare (I18) | financial strain (H60) |
| Medicare (I18) | fraction of population with expenditures exceeding income (D12) |
| Medicare (I18) | amount owed in medical bills (I13) |
| Medicare (I18) | welfare gain (D69) |