Out-of-Pocket Health Expenditures by Elderly Households: Change Over the 1980s

Abstract

This study compares out-of-pocket health expenditures of elderly and nonelderly households over the past decade, using descriptive statistics and two-stage least squares analysis of Consumer Expenditure Survey data for 1980-1981 and 1989-90. This empirical analysis provides a basis for discussion of both efficiency and equity issues in health policy. We find that increases in out-of-pocket medical care expenditures over the last decade were mainly for insurance premiums rather than medical goods and services, which indicates potential inefficiencies in health care markets. We also find that Medicare promoted equity of out-of-pocket expenditures on health care among elderly persons over the 1980s, which implies that universal national health insurance would enhance distribution equity.