Life Cycle Responses to Health Insurance Status

61 Pages Posted: 19 Mar 2016

See all articles by Florian Pelgrin

Florian Pelgrin

EDHEC Business School; EDHEC Business School

Pascal St-Amour

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Swiss Finance Institute

Multiple version iconThere are 2 versions of this paper

Date Written: July 14, 2015

Abstract

This paper studies the lifetime effects of exogenous changes in health insurance coverage (e.g. Medicare, PPACA, termination of employer-provided plans) on the dynamic optimal allocation (consumption, leisure, health expenditures), status (health, wealth and survival rates), and welfare. We solve, structurally estimate, and simulate a parsimonious life cycle model with endogenous exposition to morbidity and mortality risks to analyze the impact of young (resp. old) insurance status conditional on old (resp. young) coverage. Our results highlight strong substitution across instruments (health expenditures, and leisure) as well as across time (postponing and accelerating expenses, leisure) induced by changes in insurance statuses.

Keywords: Demand for Health, Endogenous Morbidity and Mortality Risks, Household Finance, Medicare, Simulated Moments Estimation

JEL Classification: D91, G11, I13

Suggested Citation

Pelgrin, Florian and St-Amour, Pascal, Life Cycle Responses to Health Insurance Status (July 14, 2015). Netspar Discussion Paper No. 07/2015-063. Available at SSRN: https://ssrn.com/abstract=2749236 or http://dx.doi.org/10.2139/ssrn.2749236

Florian Pelgrin

EDHEC Business School ( email )

France
Switzerland

EDHEC Business School ( email )

58 rue du Port
Lille, 59046
France

Pascal St-Amour (Contact Author)

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

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