Public Health Insurance and Household Portfolio Choices: Unraveling Financial “Side Effects” of Medicare

44 Pages Posted: 31 May 2016 Last revised: 8 Feb 2017

See all articles by Marco Angrisani

Marco Angrisani

Center for Economic and Social Research (CESR)

Vincenzo Atella

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS); Department of Economics and Finance; University of Rome Tor Vergata - Faculty of Economics

Marianna Brunetti

Dept. Economics and Finance, University of Rome Tor Vergata; CEFIN

Date Written: May 31, 2016

Abstract

Large, unpredictable and not fully insurable health-care costs represent a source of background risk that might deter households’ financial risk taking. Using panel data from the Health and Retirement Study and fixed-effects estimation, we test whether universal health insurance, like Medicare for over-65 Americans, shields against this risk promoting stockholding. Households in poor health, who face a higher risk of medical expenses, are less likely to hold stocks than their healthier counterparts. Yet, this gap is mostly eliminated by Medicare eligibility. Notably, the offsetting is primarily experienced by households without private health insurance over the observation period.

Keywords: Household portfolios; Health status; Medicare; Health insurance

JEL Classification: D14; I13; G11

Suggested Citation

Angrisani, Marco and Atella, Vincenzo and Brunetti, Marianna, Public Health Insurance and Household Portfolio Choices: Unraveling Financial “Side Effects” of Medicare (May 31, 2016). CEIS Working Paper No. 382. Available at SSRN: https://ssrn.com/abstract=2787180 or http://dx.doi.org/10.2139/ssrn.2787180

Marco Angrisani

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

Vincenzo Atella (Contact Author)

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS) ( email )

Via Columbia, 2
Rome, I-00133
Italy
+39 06 72595648 (Phone)

Department of Economics and Finance ( email )

Via Columbia 2
Roma, 00133
Italy

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
I-00133 Rome, 00133
Italy
+39 06 72595635 (Phone)
+30 06 2020 500 (Fax)

HOME PAGE: http://www.economia.uniroma2.it/sefemeq/professori/atella/

Marianna Brunetti

Dept. Economics and Finance, University of Rome Tor Vergata ( email )

Via Columbia, 2
Rome, Lazio 00133
Italy

HOME PAGE: http://economia.uniroma2.it/en/def/faculty/178/brunetti-marianna

CEFIN ( email )

via Berengario 51
Modena, modena I-41100
Italy

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