Elderly Care and Public Health Insurance Programs Evaluation

TitleElderly Care and Public Health Insurance Programs Evaluation
Publication TypeThesis
Year of Publication2007
AuthorsGao, S
Date Published2007
UniversityState University of New York at Stony Brook
KeywordsHealthcare, Medicare/Medicaid/Health Insurance

This dissertation examines the effects of Medicaid and Medicare on medical services utilization among elderly Americans using panel data from the Health and Retirement Study (HRS). In Medicaid studies, we first identify those elderly who were eligible for Medicaid coverage during 1998-2004 and then focus the analysis on these poorest elderly Americans. Relying on variation in take-up among the homogenous Medicaid eligible elderly, we explore their health care use differences. Estimation addresses the endogeneity of Medicaid participation decisions among Medicaid eligibles in medical utilization regressions. It tests what factors drive Medicaid take-up among the poorest elderly and explores whether Medicaid benefits cause the elderly to participate in the program. State Medicaid policy measures are constructed to indicate policy generosity and used as instruments which might affect people's behavior in Medicaid participation, without directly influencing health care use. We find significant positive program effects of Medicaid benefits on all medical care use, especially on long-term care (LTC). After purging the endogeneity of Medicaid participation, the treatment effects of Medicaid coverage on LTC use are significantly reduced suggesting that the decision to take-up benefits is driven by expected LTC needs. No significant changes are found among the acute care use. Moreover, the study revealed that current Medicaid eligible elderly consist of two groups. Group one consists of the pre-existing poor who are the Medicaid-targeted beneficiaries. The second group consists of non-targeted beneficiaries who have changed their consumption and saving arrangements in order to qualify for Medicaid LTC coverage. We find that some elderly with bad health condition plan in advance to transfer their assets to qualify for Medicaid. They are Medicaid beneficiaries by choice. Such behaviors are significant and the magnitude cannot be ignored which suggests that the Medicaid resources are going to non-target beneficiaries. The Medicare study, co-authored with Partha Bhattacharyya, examines the effectiveness of Medicare policy and general health market access policy over one that might encourage access to health care at younger ages. We focus on adults who are approaching entry into Medicare. We explore the total medical spending and corresponding health status of previously uninsured individuals before and after they enter Medicare compared to their insured counterparts. We examine the effects of the lack of private health insurance before age 65 on medical expenditures and health outcomes after entering into Medicare in a longitudinal framework. We follow individuals for a period of eight years, that is four years before entering Medicare and four years afterward. We identify their private health insurance status prior to entering Medicare, and we observe their expenditures and health status biannually and examine the difference of expenditures and health status between every two years. The major finding of this study is that the lack of private health insurance coverage before coming into Medicare will only temporarily skyrocketed medical expenditures of previously uninsured elderly, compared to previously insured people right after they enter Medicare. At the same time, we observe relatively better health among the uninsured. Effects are more significant for males than females. However, the trend disappears in the long-run. Which as a policy implication, expanding health insurance coverage to the uninsured at younger ages, especially males should result in substantial savings after they enter Medicare and better health in the long run. This has important Medicare policy implications when one considers the solvency issues and an aging baby-boomer population.

Endnote Keywords

Health Care Utilization

Endnote ID


Short TitleElderly Care and Public Health Insurance Programs Evaluation
Citation Key6305