Medicaid and the housing and asset decisions of the elderly: Evidence from estate recovery programs

TitleMedicaid and the housing and asset decisions of the elderly: Evidence from estate recovery programs
Publication TypeJournal Article
Year of Publication2012
AuthorsGreenhalgh-Stanley, N
JournalJournal of Urban Economics
Volume72
Issue2-3
Pagination210-224
KeywordsAdult children, Housing, Medicare/Medicaid/Health Insurance, Net Worth and Assets, Public Policy
Abstract

I examine the impact of Medicaid on elderly housing and portfolio decisions by using recent state-by-calendar-year level variation in the Medicaid treatment of owner-occupied housing assets from the adoption of Medicaid estate recovery programs. Prior to the adoption of these programs, the house, which represents the most important non-pension asset to the elderly, was exempt from determining Medicaid eligibility and served as both a place of residence and a store of wealth. Adoption of estate recovery programs changed the owner-occupied housing safety net by making the house eligible for recovery by the government, which increased the implicit tax of holding owner-occupied housing. Using data from 1993 to 2004 in the Health and Retirement Study on elderly individuals, I find that state adoption of estate recovery programs makes the elderly decrease homeownership by 4.6 , decrease home equity by 15 , and also decrease the housing share of the elderly wealth portfolio. State adoption of these programs results in elderly baseline homeowners being 33 less likely to own their homes at death and more likely to use a trust as a substitute to housing in order to preserve assets and carry out bequest motives at death. PUBLICATION ABSTRACT

Notes

Copyright - Copyright 2012 Elsevier B.V. All rights reserved. Language of summary - English Location - United States--US Pages - 210-224 ProQuest ID - 1032911238 SubjectsTermNotLitGenreText - United States--US Last updated - 2012-08-20 Place of publication - New York Corporate institution author - Greenhalgh-Stanley, Nadia DOI - 2732624501; 71069802; 34768; JUE; ELSVJUES009411901200037X

URLhttp://search.proquest.com.proxy.lib.umich.edu/docview/1032911238?accountid=14667
DOI10.1016/j.jue.2012.05.005
Endnote Keywords

Medicaid/housing/household wealth/Social policy/Business And Economics/Public Policy/estate Tax/Bequest Motives/assets/estate recovery

Endnote ID

69790

Citation Key7785