What Did Medicare Do (And Was It Worth It)? / Amy Finkelstein, Robin McKnight.

Format:

Book

Author/Creator:

Finkelstein, Amy.

Contributor:

National Bureau of Economic Research.

McKnight, Robin.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11609.

NBER working paper series no. w11609

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

What Did Medicare Do

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

We study the impact of the introduction of one of the major pillars of the social insurance system in the United States: the introduction of Medicare in 1965. Our results suggest that, in its first 10 years, the establishment of universal health insurance for the elderly had no discernible impact on their mortality. However, we find that the introduction of Medicare was associated with a substantial reduction in the elderly's exposure to out of pocket medical expenditure risk. Specifically, we estimate that Medicare's introduction is associated with a forty percent decline in out of pocket spending for the top quartile of the out of pocket spending distribution. A stylized expected utility framework suggests that the welfare gains from such reductions in risk exposure alone may be sufficient to cover between half and three-quarters of the costs of the Medicare program. These findings underscore the importance of considering the direct insurance benefits from public health insurance programs, in addition to any indirect benefits from an effect on health.

Notes:

Print version record

September 2005.