The Effects of Medicaid and Medicare Reforms on the Elderly’s Savings and Medical Expenditures
نویسندگان
چکیده
We study a model in which retired single people optimally choose consumption, medical spending and saving while facing uncertainty about their health, lifespan and medical needs. This uncertainty is partially offset by insurance provided by the government and private institutions. We first show how well the model matches important features of the data and we analyze the degree of insurance provided by current programs. We then analyze the effects of some reforms, meant to capture changes in Medicaid and Medicare, on savings and medical expenditures. Authors’ Acknowledgements Mariacristina De Nardi: Federal Reserve Bank of Chicago and NBER. Eric French: Federal Reserve Bank of Chicago. John Bailey Jones: University at Albany, SUNY. De Nardi gratefully acknowledges financial support from NSF grant SES-0317872. Jones gratefully acknowledges financial support from the Social Security Administration through the Michigan Retirement Research Center (MRRC grant UM10-16). The views expressed in this paper are those of the authors and not necessarily those of the Federal Reserve Bank of Chicago, the Federal Reserve System, the National Science Foundation, the Social Security Administration or the MRRC.
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