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The effect of housing wealth on health care spending

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  • Lovenheim, Michael F.
  • Yun, Jun Hyun

Abstract

The U.S. healthcare system requires substantial out-of-pocket payments by most consumers, which can prevent some from receiving needed medical services. At the same time, housing wealth comprises a significant proportion of household wealth that could be used to pay for medical care. We analyze the effects of housing wealth on out-of-pocket medical expenditures among older homeowners. Using data from the Health and Retirement Study and various measures of home price changes, we find no evidence that housing wealth impacts out-of-pocket medical spending. The estimates are universally small and precise, allowing us to rule out even modest-sized effects. Effects are zero across the expenditure distribution, for specific categories of expenditure, and for different types of homeowners split by health insurance status and SES. We present suggestive evidence that our results represent a mix of homeowners not needing to access their housing wealth for additional medical care and being unwilling or unable to access their home equity.

Suggested Citation

  • Lovenheim, Michael F. & Yun, Jun Hyun, 2025. "The effect of housing wealth on health care spending," Journal of Health Economics, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:jhecon:v:103:y:2025:i:c:s0167629625000542
    DOI: 10.1016/j.jhealeco.2025.103019
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    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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