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Health insurance and poverty of the older population in the United States: The importance of a health inclusive poverty measure

Sanders Korenman, Dahlia K. Remler and Rosemary T. Hyson

The Journal of the Economics of Ageing, 2021, vol. 18, issue C

Abstract: For decades, the US poverty rate has been lower among those 65 and older than among those under 65, due to more generous public transfers to the older population (Preston, 1984; Moffitt, 2015). Yet this comparison understates true poverty differences because it does not capture the greater eligibility for health insurance benefits among those 65 and older. We use a Health Inclusive Poverty Measure (HIPM; Korenman and Remler, 2016), which incorporates health needs and benefits, to estimate poverty rates and impacts of health insurance and other benefits on poverty. For those 65+, the HIPM poverty rate was nearly 2 percentage points lower than Census’ Supplemental Poverty Measure (SPM) rate, while for younger persons, the HIPM rate was 1.6 percentage points higher, due to their greater unmet health insurance needs. Among those 65+, Medicare and Social Security account for reductions in HIPM poverty of 15 to 25 percentage points and 35 to 40 percentage points, respectively. The average HIPM poverty gap after all transfers was 4% of the HIPM threshold among persons 65+ vs. 13% among those under 65. Compared to the SPM, the HIPM appears to classify a needier population as poor. Adopting a HIPM could provide more complete description of disadvantage across the age distribution and more accurate guidance for social policy (NAS 2019).

Keywords: Poverty; Aging; Health insurance; Social policy; Medicare (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jeoa.2020.100297

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