Medicare Gaps and Widow Poverty
Kathleen M. McGarry
University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)
Robert F. Schoeni
University of Michigan at Ann Arbor - Survey Research Center
Michigan Retirement Research Center Research Paper No. WP 2003-065
Several categories of medical expenditures are not covered by Medicare, including prescription drugs, most nursing home stays, and extended hospital visits. Out-of-pocket costs for these items can be substantial, and what's more, they are likely to be concentrated at the end of life. At the same time, it is well documented that poverty is 3-4 times more common among widows than among similarly aged married women. This study examines the potential link between these two phenomena, asking the question: to what extent do out-of-pocket health care costs of a dying spouse affect the financial position of the survivor? We find that out-of-pocket medical spending increases substantially just prior to death, and that these expenditures are large relative to income for a large share of elderly couples. Simulations investigate the extent to which expansions in insurance coverage to include nursing home care or prescription drug coverage could improve the financial well-being of the surviving spouse.
Number of Pages in PDF File: 37
Date posted: February 12, 2008
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