Life cycle responses to health insurance status
F. Pelgrin and
Pascal St-Amour
Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York
Abstract:
Health insurance status can change over the life cycle for exogenous reasons (e.g. Medicare for the elders, PPACA for younger agents, termination of coverage at retirement in employer-provided plans). Durability of the health capital, endogenous mortality and morbidity, as well as backward induction suggests that these changes should affect the dynamic life cycle beyond the period at which theyoccur. The purpose of this paper is to study these lifetime effects on the optimal allocation (consumption, leisure, health expenditures), status (health, wealth and survival rates), and welfare. We analyse the impact of young (resp. old) insurance status conditional on old (resp. young) coverage through the structural estimation of a dynamic model with endogenous death and sickness risks. Our resultsshow that young insurees are healthier, wealthier, consume more health care yet are less exposed to OOP risks, and substitute less (more) leisure before (after) retirement. Old insurees show similar patterns, except for lower precautionary wealth balances. Compulsory health insurance is unambiguously optimal for elders, and for young agents, except early in the life cycle. We draw other implicationsfor public policy such as Medicare and PPACA.
Keywords: household finance; endogenous morbidity and mortality risks; demand for health; medicare and patient protection and a ordable care act; simulated moments estimation (search for similar items in EconPapers)
JEL-codes: D91 G11 I13 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.york.ac.uk/media/economics/documents/hedg/workingpapers/1413.pdf Main text (application/pdf)
Related works:
Journal Article: Life cycle responses to health insurance status (2016) 
Working Paper: Life Cycle Responses to Health Insurance Status (2015) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:yor:hectdg:14/13
Access Statistics for this paper
More papers in Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom. Contact information at EDIRC.
Bibliographic data for series maintained by Jane Rawlings ().