Does widowhood explain gender differences in out-of-pocket medical spending among the elderly?

 

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Highlights:

• We study the impact of widowhood on out-of-pocket health spending among the elderly.
• Out-of-pocket health spending rises by about 24 percent upon widowhood.
• This increase is largely driven by spending on nursing homes.
• As women live longer than men, more women than men are widowed at any age.
• This explains about one third of the gender difference in out-of-pocket spending

Abstract:

Despite the presence of Medicare, out-of-pocket medical spending is a large expenditure risk facing the elderly. While women live longer than men, elderly women incur higher out-ofpocket medical spending than men at each age. In this paper, we examine whether differences in marital status and living arrangements can explain this difference. We find that out-of-pocket medical spending is approximately 24 percent higher when an individual becomes widowed, a large portion of which is spending on nursing homes. Our results suggest a substantial role of living arrangements in out-of-pocket medical spending. Our estimates combined with differences in rates of widowhood across gender suggest that marital status can explain about one third of the gender difference in total out-of-pocket medical spending, leaving a large portion unexplained. On the other hand, gender differences in widowhood more than explain the observed gender difference in out-of-pocket spending on nursing homes.

 

 

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About the Author

 

Sita Nataraj
Slavov
  • Economist Sita Nataraj Slavov specializes in public finance issues dealing with retirement and the economics of aging. Her recent work has focused on whether retiree health insurance encourages early retirement, the impact of widowhood on out-of-pocket medical expenses among the elderly and the optimal time to claim Social Security. Before joining AEI, Slavov taught a variety of economic courses at Occidental College: game theory, public finance, behavioral economics and econometrics. She has also served as a senior economist specializing in public finance issues at the White House's Council of Economic Advisers. Her work at AEI will focus on Social Security and retirement issues.


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    Email: sita.slavov@aei.org
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    Name: Brittany Pineros
    Phone: 202-862-5926
    Email: brittany.pineros@aei.org

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