The effect of health insurance on the health, health care, and labor market outcomes of the near -elderly: Evidence from the Health and Retirement Study.

Abstract

The vast majority of individuals in the United States obtain their health insurance through employer-sponsored plans. Though there are benefits to offering health insurance through the employment setting such as risk pooling, lower administrative costs, and tax advantages, this arrangement may lead to unintended side effects such as a lack of portability of benefits or uninsurance during job transitions. Those who lack health insurance have increased financial risk, diminished access to appropriate medical care, and may suffer from worse health outcomes as a consequence. The three chapters of this dissertation explore various aspects of health insurance: its effects on health care utilization and medical expenditures, on health outcomes, and finally, on the determination of wages in the market equilibrium among those around the age of 65. First, I exploit the exogenous change in health insurance that occurs for most Americans at age 65 due to Medicare enrollment to study the effects of uninsurance on health care utilization and health. I find that those who are uninsured prior to Medicare store-up demand in anticipation of insurance coverage, particularly for services that are more easily delayed and more elective in nature such as doctor's visits and outpatient surgery. I also find that those who obtain insurance coverage at age 65 experience an increased rate of diagnosis of chronic conditions such as heart and lung conditions compared to those who had continuous insurance coverage. The combination of the increased utilization and diagnosis upon obtaining insurance coverage provides evidence that those who lack insurance do not receive timely diagnosis and may have worse health trajectories throughout the rest of their life course as a result. Finally, I attempt to uncover the tradeoff between monetary wages and health insurance in the labor market equilibrium by exploiting variation in the preference for health insurance among married women. Together, these three chapters provide a unique look into the health insurance choices of the near-elderly and the consequences of the lack of health insurance on health and the use of health services.