Using the Medicare buy‐in program to estimate the effect of Medicaid on SSI participation

Abstract

This article assesses the importance of receiving supplemental health insurance on participation in Supplemental Security Income (SSI) for the elderly. The implementation of the Qualified Medicare Beneficiary (QMB) program offered a substitute for Medicaid, and expanded health insurance eligibility to a higher income level. Using a sample of elderly respondents aged 66 to 75, I find that the QMB program reduced SSI participation. More than half of the QMB participants were previously covered by SSI and Medicaid. The calculations suggest that the QMB program was not as expensive as it might first appear because of reductions in SSI expenditure.