lynx   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/fip/fedawp/2010-19.html
   My bibliography  Save this paper

The impact of medical and nursing home expenses and social insurance

Author

Listed:
  • Karen A. Kopecky
  • Tatyana Koreshkova
Abstract
We consider a life-cycle model with idiosyncratic risk in earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States, we show that (1) savings for old-age, out-of-pocket expenses account for 13.5 percent of aggregate wealth, half of which is due to nursing home expenses; (2) cross-sectional out-of-pocket nursing home risk accounts for 3 percent of aggregate wealth and substantially slows down wealth decumulation at older ages; (3) the impact of medical and nursing home expenses on private savings varies significantly across the lifetime earnings distribution; and (4) all newborns would benefit if social insurance for nursing home stays was made more generous.

Suggested Citation

  • Karen A. Kopecky & Tatyana Koreshkova, 2010. "The impact of medical and nursing home expenses and social insurance," FRB Atlanta Working Paper 2010-19, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2010-19
    as

    Download full text from publisher

    File URL: https://frbatlanta.org/-/media/Documents/research/publications/wp/2010/19.pdf?la=en
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mariacristina De Nardi & Eric French & John Bailey Jones, 2005. "Differential mortality, uncertain medical expenses, and the saving of elderly singles," Working Paper Series WP-05-13, Federal Reserve Bank of Chicago.
    2. Orazio Attanasio & Sagiri Kitao & Giovanni L. Violante, 2010. "Financing Medicare: A General Equilibrium Analysis," NBER Chapters, in: Demography and the Economy, pages 333-366, National Bureau of Economic Research, Inc.
    3. John Ameriks & Andrew Caplin & Steven Laufer & Stijn Van Nieuwerburgh, 2007. "The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives," NBER Working Papers 13105, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mariacristina De Nardi & Eric French & John B. Jones, 2010. "Why Do the Elderly Save? The Role of Medical Expenses," Journal of Political Economy, University of Chicago Press, vol. 118(1), pages 39-75, February.
    2. Tatyana Koreshkova & Karen A. Kopecky, 2009. "The Impact of Medical and Nursing Home Expenses and Social Insurance Policies on Savings and Inequality," 2009 Meeting Papers 46, Society for Economic Dynamics.
    3. Mariacristina De Nardi & Eric French & John Bailey Jones, 2016. "Savings After Retirement: A Survey," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 177-204, October.
    4. Joachim Inkmann & Paula Lopes & Alexander Michaelides, 2011. "How Deep Is the Annuity Market Participation Puzzle?," The Review of Financial Studies, Society for Financial Studies, vol. 24(1), pages 279-319.
    5. Ferreira, Pedro Cavalcanti & Gomes, Diego B.P., 2017. "Health care reform or more affordable health care?," Journal of Economic Dynamics and Control, Elsevier, vol. 79(C), pages 126-153.
    6. Tatyana Koreshkova & Karen Kopecky, 2012. "The Joint Impact of Social Security and Medicaid on Incentives and Welfare," 2012 Meeting Papers 967, Society for Economic Dynamics.
    7. Minchung Hsu, 2013. "Health Insurance and Precautionary Saving: A Structural Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 511-526, July.
    8. Katherine Baicker & Jonathan Skinner, 2011. "Health Care Spending Growth and the Future of U.S. Tax Rates," Tax Policy and the Economy, University of Chicago Press, vol. 25(1), pages 39-68.
    9. Anikó Bíró, 2013. "Subjective mortality hazard shocks and the adjustment of consumption expenditures," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1379-1408, October.
    10. Kam Ki Tang & Jie Zhang, 2007. "Morbidity, Mortality, Health Expenditures and Annuitization," CESifo Working Paper Series 2086, CESifo.
    11. Cormac O'Dea & David Sturrock, 2019. "Survival pessimism and the demand for annuities," IFS Working Papers W19/02, Institute for Fiscal Studies.
    12. Giordana, Gastón A. & Pi Alperin, María Noel, 2023. "Old age takes its toll: Long-run projections of health-related public expenditure in Luxembourg," Economics & Human Biology, Elsevier, vol. 50(C).
    13. Mariacristina De Nardi & Eric French & John Bailey Jones, 2016. "Medicaid Insurance in Old Age," American Economic Review, American Economic Association, vol. 106(11), pages 3480-3520, November.
    14. Gong, Guan & Webb, Anthony, 2010. "Evaluating the Advanced Life Deferred Annuity -- An annuity people might actually buy," Insurance: Mathematics and Economics, Elsevier, vol. 46(1), pages 210-221, February.
    15. Taiyo FUKAI & Hidehiko ICHIMURA & Kyogo KANAZAWA, 2018. "Quantifying Health Shocks over the Life Cycle," Discussion papers 18014, Research Institute of Economy, Trade and Industry (RIETI).
    16. Jeffrey R. Brown & Amy Finkelstein, 2009. "The Private Market for Long‐Term Care Insurance in the United States: A Review of the Evidence," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(1), pages 5-29, March.
    17. Conesa, Juan Carlos & Costa, Daniela & Kamali, Parisa & Kehoe, Timothy J. & Nygard, Vegard M. & Raveendranathan, Gajendran & Saxena, Akshar, 2018. "Macroeconomic effects of Medicare," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 27-40.
    18. Michael Keane & Elena Capatina & Shiko Maruyama, 2019. "Health Shocks and the Evolution of Earnings over the Life-Cycle," Discussion Papers 2018-14a, School of Economics, The University of New South Wales.
    19. Samuel Marshall & Kathleen McGarry & Jonathan S. Skinner, 2011. "The Risk of Out-of-Pocket Health Care Expenditure at the End of Life," NBER Chapters, in: Explorations in the Economics of Aging, pages 101-128, National Bureau of Economic Research, Inc.
    20. Russell Cooper & Guozhong Zhu, 2016. "Household Finance over the Life-Cycle: What does Education Contribute?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 20, pages 63-89, April.

    More about this item

    Keywords

    out-of-pocket medical expenses; precautionary savings; nursing home expenses; welfare costs;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • I1 - Health, Education, and Welfare - - Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedawp:2010-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rob Sarwark (email available below). General contact details of provider: https://edirc.repec.org/data/frbatus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    Лучший частный хостинг