Public health insurance and private savings

Jonathan Gruber, Aaron Yelowitz

Research output: Contribution to journalArticlepeer-review

142 Scopus citations

Abstract

We assess the effect of a means- and asset-tested social insurance program, Medicaid, on the savings behavior of households. We do so using data on both asset holdings and consumption, matched to information on the eligibility of families for health insurance coverage under this program. Exogenous variation in Medicaid eligibility is provided by the dramatic expansion of this program over the 1984-93 period. We document that Medicaid eligibility has a sizable and significant negative effect on wealth holdings, and we confirm this finding by showing a strong positive association between Medicaid eligibility and consumption expenditures. We also exploit the fact that asset testing was phased out by the Medicaid program over this period to document that these Medicaid effects are much stronger in the presence of an asset test.

Original languageEnglish
Pages (from-to)1249-1274
Number of pages26
JournalJournal of Political Economy
Volume107
Issue number6
DOIs
StatePublished - 1999

ASJC Scopus subject areas

  • Economics and Econometrics

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