Health Shocks During Uninsured Spells : Bad Luck or Health Promoting?

An existing literature shows that health shocks can induce healthier behaviors. However, almost no work has explored heterogeneity in post-shock behavioral decisions based on financial risk exposure to medical spending. Using the Health and Retirement Study over 10 survey waves (1992-2010) and targeting individuals under the age of 65 (pre-Medicare years), we demonstrate that those who experience a health shock simultaneously with a spell of being uninsured are roughly two to three times more likely not to smoke compared to those with different insurance status (employment-sponsored or Medicaid) at the time of the same shock. These individuals often respond to the health shock in a fashion that mirrors survey respondents who are continuously uninsured during the pre-Medicare years. While the health shock discourages tobacco consumption for each insurance group (with the Medicaid group as an important exception), uninsured status at the arrival of the health shock appears to provide substantive additional motivation not to smoke. We infer that at least some of this motivation is related to the financial consequences of the health shock via out-of-pocket medical expenditures