The Medicare Eligibility Age: Impacts on Health Behavior and Outcomes

Since many people are talking about raising the medicare eligibility age (e.g. Maya MacGuineas vs. Aaron E. Carroll, Matt Yglesias, Jared Bernstein, etc), I thought I’d highlight an AER paper by David Card, Carlos Dobkin, and Nicole Maestas that uses Medicare eligibility rules (i.e. you are eligible when you turn 65) to identify its impact on health behavior and outcomes. Some compelling figures and a short summary are below the fold.

card_medicare1 card_medicare2 card_medicare3

Medicare eligibility is associated with a sharp increase in average coverage rates at age 65 and a narrowing in coverage disparities across different groups in the U.S. population.

Our estimates show that insurance coverage has a significant causal effect on self- reported access to health care and on health care utilization. Race and education groups that experience the largest gains in insurance coverage at age 65 experience large reductions in the probability of delaying or not receiving medical care, and relative increases in the probability of an annual doctor visit

The impact of Medicare eligibility on health outcomes is harder to assess, both because of difficulties in measuring health, and because health is less likely to change discretely in response to insurance coverage. Perhaps surprisingly, we find a statistically significant impact of reaching age 65 on self-reported health, with the largest gains among the education and race groups that experience the largest increases in insurance coverage at age 65. On the other hand, we find no evidence of a discrete change in mortality rates at 65, nor do we see any shift in the rate of growth of mortality after 65. These findings have to interpreted cautiously since it is difficult to identify a plausible comparison group for post-65 mortality rates in the absence of Medicare. Taken as a whole, we believe our findings point to a significant but relatively modest impact of health insurance coverage on health. 

Note: the graphs are from the NBER working paper and that the data are pre-ACA.

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar.
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14 Responses to The Medicare Eligibility Age: Impacts on Health Behavior and Outcomes

  1. Pingback: Economist's View: Links for 12-10-2012

  2. offthelows says:

    This is sort of a land of unicorns argument given the medicare cost curve is not sustainable. Yeah, stopping the continuation of trillion dollar annual deficits mostly fueled by rising medicare costs won’t create positive results for those who had been receiving the unsustainable benefit, as would the government hypothetically discontinuing $100,000 annual payments to all Americans.

    • Joe Mazzilli says:

      It’s health care costs that are unsustainable, not medicare per se. Medicare has had more success containing these costs than private industry. If medicare was authorized to negotiate drug costs there would be significant savings, as there would be as well if younger people were allowed to buy into it. Trillion dollar deficits can be easily contained by raising the top marginal tax rate to 70%, where it was in the post-WWII days to which you obviously long to return.

  3. Pingback: Graph of the day: Medicare age change matters most for minorities

  4. Pingback: Graph of the day: Medicare age change matters most for minorities | The Penn Ave Post

  5. Spark says:

    The cost to insure 65 and 66 year-olds is a tiny fraction of medicare’s budget; most of medicare’s budget are in the last 6 months of life. Notice the huge number of 64-year-olds who delayed care; asking them to delay care for two more years will just mean you’ll have very sick, very expensive 67-year-olds entering the system. Countries that have lowered the medicare age have lowered the percentage of GDP spent on healthcare while simultaneously raising the average lifespan.

    If you want to control costs, allow medicare to negotiate prices. Our current system is like going into a car dealership and buying the first car the dealer suggests at whatever price he asks.

  6. Pingback: Obama signals cutbacks in Medicare eligibility « Phil Ebersole's Blog

  7. Pingback: Counterparties: How not to fix Medicare | Felix Salmon

  8. Pingback: Counterparties: How not to fix Medicare – Reuters Blogs (blog) | Hani Dalgamouni

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  10. Medicare is really a public health program. It is administered through the United States government’s Department of Health and Human Services. In most cases, it offers for medical care, medical and prescription insurance cover for Americans older than 65.

  11. Pingback: Counterparties: How not to fix Medicare | Felix Salmon | Independent News Hub

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