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Medical spending of the U.S. elderly

De Nardi, M; French, E; Jones, J; McCauley, J; (2015) Medical spending of the U.S. elderly. (NBER Working Paper 21270). National Bureau of Economic Research: Cambridge, MA, United States. Green open access

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We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 and that they are very concentrated: the top 10% of all spenders are responsible for 52% of medical spending in a given year. In addition, those currently experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We also find that the poor consume more medical goods and services than the rich and have a much larger share of their expenses covered by the government. Overall, the government pays for $65\%$ of the elderly's medical expenses. Despite this, the expenses that remain after government transfers are even more concentrated among a small group of people. Thus, government health insurance, while potentially very valuable, is far from complete. Finally, while medical expenses before death can be large, on average they constitute only a small fraction of total spending, both in the aggregate and over the life cycle. Hence, medical expenses before death do not appear to be an important driver of the high and increasing medical spending found in the U.S.

Type: Working / discussion paper
Title: Medical spending of the U.S. elderly
Open access status: An open access version is available from UCL Discovery
DOI: 10.3386/w21270
Publisher version: http://www.nber.org/papers/w21270
Language: English
Additional information: Copyright © 2015 by Mariacristina De Nardi, Eric French, John Bailey Jones, and Jeremy McCauley. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
Keywords: Medical expenses, old age
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/1493278
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