Life cycle responses to health insurance status

Florian Pelgrin and Pascal St-Amour

Journal of Health Economics, 2016, vol. 49, issue C, 76-96

Abstract: This paper studies the lifetime effects of exogenous changes in health insurance coverage (e.g. Medicare, PPACA, termination of employer-provided plans) on the dynamic optimal allocation (consumption, leisure, health expenditures), status (health and wealth), and welfare. We solve, simulate, and structurally estimate a parsimonious life cycle model with endogenous exposure to morbidity and mortality risks, and exogenous health insurance. By varying coverage, we identify the marginal effects of insurance when young and/or when old on allocations, statuses, and welfare. Our results highlight positive effects of insurance on health, wealth and welfare, as well as mid-life substitution away from healthy leisure in favor of more health expenses, caused by peaking wages, and accelerating health issues.

Keywords: Demand for health; Endogenous morbidity and mortality risks; Asset accumulation; Medicare; Simulated moments estimation (search for similar items in EconPapers)
JEL-codes: D91 G11 I13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Life Cycle Responses to Health Insurance Status (2015)
Working Paper: Life cycle responses to health insurance status (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:49:y:2016:i:c:p:76-96

DOI: 10.1016/j.jhealeco.2016.06.007

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