We study the costs and benefits of Medicaid in a model in which retired single people optimally choose consumption, medical spending and saving, while facing uncertainty about their health, lifespan and medical needs. We document Medicaid take-up rates by age, permanent income, and gender in the data. We show how well the model matches important features of the data and we analyze the degree of insurance provided by current programs. We finally compute the costs and benefits of the Medicaid program for people of different ages and lifetime resources.
More papers in 2011 Meeting Papers from Society for Economic Dynamics Address: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA Contact information at EDIRC. Series data maintained by Christian Zimmermann ().