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Are coresidence and nursing homes substitutes? Evidence from Medicaid spend-down provisions

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  • Mommaerts, Corina

Abstract

This paper measures the extent to which the price of nursing home care affects a potential substitute living arrangement: coresidence with adult children. Exploiting variation in state Medicaid income “spend-down” provisions over time, I find that living in a state with a spend-down provision decreases the prevalence of coresidence with adult children by 1–4 percentage points for single elderly individuals, with a corresponding increase in the use of nursing home care. These findings suggest that changes in Medicaid eligibility for long-term care benefits could have large impacts on living arrangements, care utilization patterns, and Medicaid expenditures.

Suggested Citation

  • Mommaerts, Corina, 2018. "Are coresidence and nursing homes substitutes? Evidence from Medicaid spend-down provisions," Journal of Health Economics, Elsevier, vol. 59(C), pages 125-138.
    • Handle: RePEc:eee:jhecon:v:59:y:2018:i:c:p:125-138
    DOI: 10.1016/j.jhealeco.2018.04.003
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