Risk of Large Medical Expenditures at Older Ages and Their Impact on Economic Well-being
dc.contributor.author | Rohwedder, Susann | |
dc.contributor.author | Hudomiet, Péter | |
dc.contributor.author | Hurd, Michael D. | |
dc.date.accessioned | 2024-03-05T15:18:47Z | |
dc.date.available | 2024-03-05T15:18:47Z | |
dc.date.issued | 2022-10 | |
dc.identifier.citation | Rohwedder, Susann, Péter Hudomiet, and Michael D. Hurd. “Risk of Large Medical Expenditures at Older Ages and Their Impact on Economic Well-being.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2022-457. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp457.pdf | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/192617 | en |
dc.description.abstract | We study out-of-pocket (OOP) medical expenditure risk of the U.S. population ages 55 and older using data from the Health and Retirement Study and its supplemental survey on household spending. We document trends in individual-level OOP spending from 1998 to 2018, both at the median and 95th percentile, showing a large increase until 2004, followed by rapid declines, so that 2018 OOP was less than 1998 OOP spending. We show how these changes impacted the budget share of OOP as a fraction of total household spending and analyze how households adjust the composition of their spending as OOP expenses vary. Because the distribution of OOP expenses is skewed, households face a non-negligible risk of incurring a large expense. We examined the extent to which OOP medical expenditures contribute to economic hardship among older households, as measured by food insecurity and skipping medications because of cost. We found a weak relationship with respect to food insecurity, suggesting that government programs, like Medicaid, help protect against OOP risk leading to such as an extreme form of hardship. However, we obtained statistically significant and economically meaningful effects with respect to medication insecurity: An increase from the 10th to the 90th percentile in OOP spending would increase the probability of medication insecurity by about 15 percentage points. When asked about their perceived OOP risk, individuals tend to substantially overestimate the chances of large OOP spending, although less so at advanced ages; prior experience with OOP expenses seems to lead to more accurate expectations. | en_US |
dc.description.sponsorship | The Social Security Administration through the Michigan Retirement and Disability Research Center award RDR18000002-04, UM22-09 | en_US |
dc.language.iso | en_US | en_US |
dc.relation.ispartofseries | MRDRC WP 2022-457 | en_US |
dc.subject | Out-of-pocket medical expenditure risk, household spending, food insecurity, budget shares, expectation | en_US |
dc.title | Risk of Large Medical Expenditures at Older Ages and Their Impact on Economic Well-being | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Population and Demography | |
dc.subject.hlbtoplevel | Social Sciences | |
dc.contributor.affiliationother | RAND Corporation | en_US |
dc.contributor.affiliationother | RAND Corporation | en_US |
dc.contributor.affiliationother | RAND Corporation | en_US |
dc.contributor.affiliationumcampus | Ann Arbor | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/192617/1/wp457.pdf | |
dc.identifier.doi | https://dx.doi.org/10.7302/22433 | |
dc.description.filedescription | Description of wp457.pdf : working paper | |
dc.description.depositor | SELF | en_US |
dc.working.doi | 10.7302/22433 | en_US |
dc.owningcollname | Retirement and Disability Research Center, Michigan (MRDRC) |
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