The Effects of Medicare on Medical Expenditure Risk and Financial Strain

Silvia Barcellos and Mireille Jacobson

No 19954, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I13 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
Note: EH
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Citations: View citations in EconPapers (16)

Published as Silvia Helena Barcellos & Mireille Jacobson, 2015. "The Effects of Medicare on Medical Expenditure Risk and Financial Strain," American Economic Journal: Economic Policy, vol 7(4), pages 41-70.

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Journal Article: The Effects of Medicare on Medical Expenditure Risk and Financial Strain (2015)
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