Modeling Health Care Spending Growth of Older Adults.

OBJECTIVE: To forecast out-of-pocket health care spending among older adults. Long-term forecasts allow policy makers to explore potential impacts of policy scenarios, but existing microsimulations do not incorporate details of supplemental insurance coverage and income effects on health care spending. DATA SOURCES: Dynamic microsimulation calibrated to survey and administrative data. STUDY DESIGN: We augment Urban Institute's Dynamic Simulation of Income Model (DYNASIM) with modules that incorporate demand responses and economic equilibria, with dynamics driven by exogenous technological change. A lengthy technical appendix provides details of the microsimulation model and economic assumptions for readers interested in applying these techniques. PRINCIPAL FINDINGS: The model projects total out-of-pocket spending (point of care plus premiums) as a share of income for adults aged 65 and older. People with lower incomes and poor health fare worse, despite protections of Medicaid. Spending rises 40 percent from 2012 to 2035 (from 10 to 14 percent of income) for the median beneficiary, but it increases from 5 to 25 percent of income for low-income beneficiaries and from 23 to 29 percent for the near poor who are in fair/poor health. CONCLUSIONS: Despite Medicare coverage, near-poor seniors will face out-of-pocket spending that would render them, in practical terms, underinsured.

Financing Long-Term Services And Supports: Options Reflect Trade-Offs For Older Americans And Federal Spending.

About half of older Americans will need a high level of assistance with routine activities for a prolonged period of time. This help is commonly referred to as long-term services and supports (LTSS). Under current policies, these individuals will fund roughly half of their paid care out of pocket. Partly as a result of high costs and uncertainty, relatively few people purchase private long-term care insurance or save sufficiently to fully finance LTSS; many will eventually turn to Medicaid for help. To show how policy changes could expand insurance's role in financing these needs, we modeled several new insurance options. Specifically, we looked at a front-end-only benefit that provides coverage relatively early in the period of disability but caps benefits, a back-end benefit with no lifetime limit, and a combined comprehensive benefit. We modeled mandatory and voluntary versions of each option, and subsidized and unsubsidized versions of each voluntary option. We identified important differences among the alternatives, highlighting relevant trade-offs that policy makers can consider in evaluating proposals. If the primary goal is to significantly increase insurance coverage, the mandatory options would be more successful than the voluntary versions. If the major aim is to reduce Medicaid costs, the comprehensive and back-end mandatory options would be most beneficial.

The protective effect of marriage for survival: a review and update.

The theory that marriage has protective effects for survival has itself lived for more than 100 years since Durkheim's groundbreaking study of suicide (Durkheim 1951 [1897]). Investigations of differences in this protective effect by gender, by age, and in contrast to different unmarried statuses, however, have yielded inconsistent conclusions. These investigations typically either use data in which marital status and other covariates are observed in cross-sectional surveys up to 10 years before mortality exposure, or use data from panel surveys with much smaller sample sizes. Their conclusions are usually not based on formal statistical tests of contrasts between men and women or between never-married, divorced/separated, and widowed statuses. Using large-scale pooled panel survey data linked to death registrations and earnings histories for U.S. men and women aged 25 and older, and with appropriate contrast tests, we find a consistent survival advantage for married over unmarried men and women, and an additional survival "premium" for married men. We find little evidence of mortality differences between never-married, divorced/separated, and widowed statuses.

Economic status in later life among women who raised children outside of marriage.

OBJECTIVE: Many single mothers are likely to face special economic challenges in old age, because they often have limited employment histories and cannot rely on husbands for financial support. This article examines the economic status of these women in later life. METHODS: The analysis uses nationally representative data from the Health and Retirement Study to estimate multivariate models of income, assets, and poverty rates for women aged 65-75 in 1999. RESULT: Controlling for education, current marital status, and race and ethnicity, the models indicate that women who spent > or =10 years raising dependent children outside of marriage are 55% more likely to live in poverty at ages 65-75 than women who were always married when their children were young. DISCUSSION: The financial difficulties confronting single mothers raising children persist into later life. Social Security reforms, especially those that are not tied to the current system of spousal and survivor benefits, could improve retirement security for these vulnerable women, whose numbers will begin to soar when the many women who raised children outside of marriage in the 1970s retire in coming years.