Medicaid and the housing and asset decisions of the elderly: Evidence from estate recovery programs

Greenhalgh-Stanley, Nadia

doi:10.1016/j.jue.2012.05.005

Cited by 20 publications

(12 citation statements)

References 27 publications

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“…Most households do not use housing equity to maintain their preretirement nonhousing standard of living after retirement, even though housing equity may serve as a buffer that can be drawn down in low-probability, high-cost circumstances. Greenhalgh-Stanley’s (2010) study finds that 59.9 percent of respondents in the AHEAD survey who died between 1993 and 2004 were homeowners at the time of death. Davidoff (2009) suggests that the presence of substantial housing equity on many households’ balance sheets may help to explain the limited demand for annuity products.…”

Section: Shocks To Family Structure and The Drawdown Of Post-retiremementioning

confidence: 96%

The Composition and Drawdown of Wealth in Retirement

Poterba

Venti

Wise

2011

Journal of Economic Perspectives

170

100

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This paper presents evidence on the resources available to households as they enter retirement. It draws heavily on data collected by the Health and Retirement Study. We calculate the "potential additional annuity income" that households could purchase, given their holdings of non-annuitized financial assets at the start of retirement. We also consider the role of housing equity in the portfolios of retirement-age households and explore the extent to which households draw down housing equity and financial assets as they age. Because home equity is often conserved until very late in life, for many households it may provide some insurance against the risk of living longer than expected. Finally, we consider how our findings bear on a number of policy issues, such as the role for annuity defaults in retirement saving plans.

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Section: Shocks To Family Structure and The Drawdown Of Post-retiremementioning

confidence: 96%

The Composition and Drawdown of Wealth in Retirement

Poterba

Venti

Wise

2011

Journal of Economic Perspectives

170

100

View full text Add to dashboard Cite

show abstract

“…Table 4, Panel A shows the results of these regressions. 2004-20072003-20062002-20052001-20042000-2003Treated Years 2010-201220092008-20102007-20092006-2008 1is for those 50-64 with educational attainment less than a college degree. Column (2) is for those 50-64 with weekly earnings less than $1000.…”

Section: Robustness Checksmentioning

confidence: 99%

Did Medicaid Expansion Reduce Medical Divorce?

Slusky

Ginther

2017

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Medical divorce occurs when couples split up so that one spouse's medical bills do not deplete the assets of the healthy spouse. It has not been studied in the economics literature, but it has been discussed by attorneys and widely reported in the media. We develop a model of medical divorce that demonstrates that divorce is optimal when a couple's joint assets exceed the exempted asset level. We use the Affordable Care Act's Medicaid expansion which removed asset tests to qualify for Medicaid as exogenous variation in the incidence of divorce (as it was only implemented by some states). We find that the ACA expansion decreased the prevalence of divorce by 11.6% among those ages 50-64 with a college degree. These results are robust to numerous placebo checks including older subsamples (who qualify for Medicare regardless of assets) and earlier years (before the expansion was implemented). Our results suggest that Medicaid expansion reduced medical divorce.

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“…To better understand the size of the estimates, it is useful to compare them to measures in the existing literature. Greenhalgh‐Stanley () measures changes in housing equity using state‐by‐time variation in state adoption of Medicaid estate recovery programs. Reductions of housing equity are smaller in magnitude at approximately $28,000 for unmarried individuals compared to married individuals, equating to a decrease of approximately 23 percent for this group.…”

Section: Estimation Resultsmentioning

confidence: 99%

“…Earlier studies have shown that elderly households are responsive to Medicaid policy due to the implicit tax it imposes. Households may attempt to protect or spend down their assets in order to gain eligibility (Coe, ; Greenhalgh‐Stanley, ). There is also evidence that elderly homeownership and living arrangement decisions are sensitive to Medicare policy (Engelhardt & Greenhalgh‐Stanley, ) and Social Security benefits (Engelhardt, Gruber, & Perry, ; Engelhardt, ).…”

Section: Introductionmentioning

confidence: 99%

Homeowner Behavior, Health Status, and Medicaid Payment Eligibility: Evidence from the Deficit Reduction Act of 2005

Ricks¹

2018

J Policy Anal Manage

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This paper analyzes the effect of a change in the status of housing equity as a protected asset for Medicaid long-term care payment eligibility. A difference-in-differencein-differences strategy is employed to estimate the effect of the policy on the housing equity holdings of potentially treated individuals. Using a panel of unmarried homeowners, the policy induced treated individuals who were likely to require long-term care to hold less housing equity by values of $82,000 to $193,000 relative to control individuals. This equates to relative reductions of 12 to 29 percent for treated individuals after the policy change. Similar effects are not observed when considering health measures less predictive of long-term care services and for a sample of married households who were unlikely affected by the policy. These estimates confirm the importance of the housing asset as a shelter for Medicaid eligibility. C 2018 by the Association for Public Policy Analysis and Management.

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Medicaid and the housing and asset decisions of the elderly: Evidence from estate recovery programs

Cited by 20 publications

References 27 publications

The Composition and Drawdown of Wealth in Retirement

The Composition and Drawdown of Wealth in Retirement

Did Medicaid Expansion Reduce Medical Divorce?

Homeowner Behavior, Health Status, and Medicaid Payment Eligibility: Evidence from the Deficit Reduction Act of 2005

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