Medicare Gaps and Widow Poverty

37 Pages Posted: 12 Feb 2008  

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

Date Written: December 2003

Abstract

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.

Suggested Citation

McGarry, Kathleen M. and Schoeni, Robert F., Medicare Gaps and Widow Poverty (December 2003). Michigan Retirement Research Center Research Paper No. WP 2003-065. Available at SSRN: https://ssrn.com/abstract=1092154 or http://dx.doi.org/10.2139/ssrn.1092154

Kathleen M. McGarry

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
405 Hilgard Avenue
Los Angeles, CA 90095-1477
United States
310-206-2833 (Phone)
310-825-9528 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert F. Schoeni (Contact Author)

University of Michigan at Ann Arbor - Survey Research Center ( email )

Ann Arbor, MI 48106-1248
United States

HOME PAGE: http://www-personal.umich.edu/~bschoeni/

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