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Are coresidence and nursing homes substitutes? Evidence from Medicaid spend-down provisions

Corina Mommaerts

Journal of Health Economics, 2018, vol. 59, issue C, 125-138

Abstract: This paper measures the extent to which the price of nursing home care affects a potential substitute living arrangement: coresidence with adult children. Exploiting variation in state Medicaid income “spend-down” provisions over time, I find that living in a state with a spend-down provision decreases the prevalence of coresidence with adult children by 1–4 percentage points for single elderly individuals, with a corresponding increase in the use of nursing home care. These findings suggest that changes in Medicaid eligibility for long-term care benefits could have large impacts on living arrangements, care utilization patterns, and Medicaid expenditures.

Keywords: Long-term care; Medicaid; Living arrangements; Coresidence; Informal care; Nursing homes (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:jhecon:v:59:y:2018:i:c:p:125-138