stochastic mortality risk and health shock risk numerically. These shocks are interpreted as critical illness and can negatively … affect the expected remaining lifetime, the health expenses, and the income. In order to hedge the health expense effect of a …

Health insurance status can change over the life cycle for exogenous reasons (e.g. Medicare for the elders, PPACA for … younger agents, termination of coverage at retirement in employer-provided plans). Durability of the health capital …, endogenous mortality and morbidity, as well as backward induction suggests that these changes should affect the dynamic life …