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Key Findings Details

The Effects of Medicaid and Medicare Reforms on the Elderly’s Savings and Medical Expenditures
Mariacristina De Nardi, Eric French and John Bailey Jones
WP 2010-236

  • We create a model to analyze the effects of recent changes in Medicaid and Medicare on out-of-pocket and total medical expenditures, and savings for retired single people.
  • Households in the lower income quintiles are much more likely to receive Medicaid transfers, but the transfers that they receive are on average relatively small.
  • Households in the higher income quintiles are much less likely to receive any Medicaid pay-outs, but when they do, these pay-outs are often very big and correspond to severe and expensive medical conditions.
  • Reforms to make Medicaid more generous reduce the elderly's savings at all income levels, including the highest.
  • Reforms that reduce Medicare copays that elderly people incur when consuming medical goods and services benefit higher income people more than poorer ones, because the poor are already well-insured by Medicaid.

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