Using data from the Asset and Health Dynamics of the Oldest Old survey, the authors find that the assets of people who die decline much faster than the assets of people who survive, even after controlling for age, sex, and initial asset levels. Out-of-pocket medical expenses right before death...

Using data from the Health and Retirement Survey (HRS) and Assets and Health Dynamics of the Oldest Old (AHEAD), this paper presents estimates of the stochastic process that determines both the distribution and dynamics of health costs. We find that the data generating process for health costs...

This paper constructs a rich model of saving for retired single people. Our framework allows for bequest motives and heterogeneity in medical expenses and life expectancies. We estimate the model using AHEAD data and the method of simulated moments. The data show that out-of-pocket medical...

In 2009, Medicaid spent over $75 billion on 5.3 million elderly beneficiaries. This article describes the Medicaid rules for the elderly and discusses their economic implications.

The brief’s key findings are: *Medicaid covers not only the low-income elderly but also those with higher incomes who become impoverished by health costs, such as nursing home care. *The percentage of high-income single retirees receiving Medicaid rises with age – from near zero for those in...

We study the costs and benefits of Medicaid in a model in which retired single people optimally choose consumption, medical spending and saving, while facing uncertainty about their health, lifespan and medical needs. We document Medicaid take-up rates by age, permanent income, and gender in the...

The old age provisions of the Medicaid program were designed to insure poor retirees against medical expenses. However, it is the rich who are most likely to live long and face expensive medical conditions when very old. We estimate a rich structural model of savings and endogenous medical...

Rich people, women, and healthy people live longer. We document that this heterogeneity in life expectancy is large. We use an estimated structural model to assess the impact of life expectancy variation on the elderly’s savings. We find that the differences in life expectancy related to...

This paper constructs a rich model of saving for retired single people. Our framework allows for bequest motives and heterogeneity in medical expenses and life expectancies. We estimate the model using AHEAD data and the method of simulated moments. The data show that out-of-pocket medical...