The Impacts of Lifestyle Behavior on Medicare Costs: a Panel Data Analysis at the State Level

This article is a departure from many prior studies in the literature on Medicare spending in the United States. Previous works have focused on time-invariant or hereditary demographic characteristics and congenital health status. In contrast, this study examined state-level variations in Medicare costs per enrollee with special emphasis on prominent acquired health-related lifestyle attributes that are more reversible over a short time period. Our main findings are (1) reversible acquired health-related lifestyle attributes such as smoking and obesity are statistically significant determinants of state-level variations in Medicare costs; and (2) state-level variations in Medicare spending is elastic with respect to changes in the prevalence of the two acquired health-related lifestyle attributes.