The old age provisions of the Medicaid program were designed to insure retirees against medical expenses. We estimate a structural model of savings and medical spending and use it to compute the distribution of lifetime Medicaid transfers and Medicaid valuations across currently single retirees. Compensating variation calculations indicate that current retirees value Medicaid insurance at more than its actuarial cost, but that most would value an expansion of the current Medicaid program at less than its cost. These findings suggest that for current single retirees, the Medicaid program may be of the approximately right size.
Authors
CPP Co-Director
Eric is the Montague Burton Professor of Industrial Relations and Labour Economics at the University of Cambridge and Professor of Economics at UCL.
Research Fellow University of Minnesota and Federal Reserve Bank of Minneapolis
Mariacristina is an Research Fellow at the IFS and also a Professor in the Economics Department at the University of Minnesota.
John Bailey Jones
Journal article details
- DOI
- 10.1257/aer.20140015
- Publisher
- American Economic Association
- Issue
- Volume 106, Issue 11, November 2016, pages 3480-3520
Suggested citation
J, Bailey Jones and M, De Nardi and E, French. (2016). 'Medicaid insurance in old age' 106(11/2016), pp.3480–3520.
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