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The Costs and Benefits of Medicaid in Old Age


  • John Bailey Jones

    (University at Albany, SUNY)

  • Eric French

    (Federal Reserve Bank of Chicago)

  • Mariacristina De Nardi

    (Federal Reserve Bank of Chicago)


We study the costs and benefits of Medicaid in a model in which retired single people optimally choose consumption, medical spending and saving, while facing uncertainty about their health, lifespan and medical needs. We document Medicaid take-up rates by age, permanent income, and gender in the data. We show how well the model matches important features of the data and we analyze the degree of insurance provided by current programs. We finally compute the costs and benefits of the Medicaid program for people of different ages and lifetime resources.

Suggested Citation

  • John Bailey Jones & Eric French & Mariacristina De Nardi, 2011. "The Costs and Benefits of Medicaid in Old Age," 2011 Meeting Papers 111, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:111

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    References listed on IDEAS

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