Long‐term care has profound intergenerational implications. It can be costly for those who need it and onerous for loved ones who provide it. We pinpoint three intergenerational aspects of long‐term care that require further research. One concerns the link between costs of private care and intergenerational wealth transfers. The second concerns the link between participation in care and the work and welfare of family providers. The third relates to intergenerational tensions that these and other late‐in‐life interactions create. We outline innovations in modeling and measurement that would improve understanding of intergenerational linkages and their implementation in appropriate panel data.
Americans Support Price Shopping For Health Care, But Few Actually Seek Out Price Information | RANDSeptember 7, 2017
The growing awareness of the wide variation in health care prices, increased availability of price data, and increased patient cost sharing are expected to drive patients to shop for lower-cost medical services. We conducted a nationally representative survey of 2,996 nonelderly US adults who had received medical care in the previous twelve months to assess how frequently patients are price shopping for care and the barriers they face in doing so. Only 13 percent of respondents who had some out-of-pocket spending in their last health care encounter had sought information about their expected spending before receiving care, and just 3 percent had compared costs across providers before receiving care. The low rates of price shopping do not appear to be driven by opposition to the idea: The majority of respondents believed that price shopping for care is important and did not believe that higher-cost providers were of higher quality. Common barriers to shopping included difficulty obtaining price information and a desire not to disrupt existing provider relationships.
The average American’s lifetime risk of using a nursing home is substantially greater than previous research has suggested, according to a new RAND Corporation study.
Among persons age 57 to 61, 56 percent will stay in a nursing home at least one night during their lifetime, according findings published online by the journal Proceedings of the National Academy of Sciences.
Previous studies have generally corroborated the U.S. Department of Health and Human Services’ estimate that only 35 percent of older Americans are likely to use a nursing home in their later years.
Savings Medicare Beneficiaries Need for Health Expenses: Some Couples Could Need as Much as $350,000 by Paul Fronstin, Jack VanDerhei :: SSRNFebruary 9, 2017
This paper examines the amount of savings Medicare beneficiaries are projected to need to cover program deductibles, premiums and other health expenses in retirement. For the purposes of this study, health expenses include premiums for Medicare Parts B and D, premiums for Medigap Plan F, and out-of-pocket spending for outpatient prescription drugs. Data come from a variety of sources and are used in a Monte Carlo simulation model that simulates 100,000 observations, allowing for the uncertainty related to individual mortality and rates of return on assets in retirement.
- In 2016, a 65-year-old man would need $72,000 in savings and a 65-year-old woman would need $93,000 if each had a goal of having a 50 percent chance of having enough savings to cover health care expenses in retirement.
- If they wanted a 90 percent chance of having enough savings, the man would need $127,000 and the woman would need $143,000.
- A couple with median prescription drug expenses would need $165,000 if they had a goal of having a 50 percent chance of having enough savings to cover health care expenses in retirement. If they wanted a 90 percent chance of having enough savings, they would need $265,000.
- For a couple with drug expenses at the 90th percentile throughout retirement who wanted a 90 percent chance of having enough money saved for health care expenses in retirement by age 65, targeted savings would be $349,000 in 2016.
- From 2015 to 2016, projected savings targets increased between 0 percent and 6 percent. In contrast, savings targets declined between 2011 and 2014, but then they increased from 2014 to 2015 as well. Despite the increase in savings targets since 2014, the 2016 savings targets continue to be lower than they were in 2012 almost across the board. It is important to note that many individuals are likely to need more than the amounts cited in this report.
This analysis does not factor in the savings needed to cover long-term care expenses and other expenses not covered by Medicare, nor does it take into account the fact that many individuals retire prior to becoming eligible for Medicare. However, some workers will need to save less than what is reported if they choose to work past age 65, thereby postponing enrollment in Medicare Parts B and D if they receive health benefits as active workers.
Concentrating on the Fall of the Labor Share by David H. Autor, David Dorn, Lawrence F. Katz, Christina Patterson, John Van Reenen :: SSRNFebruary 7, 2017
The recent fall of labor’s share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a “superstar firm” model where industries are increasingly characterized by “winner take most” competition, leading a small number of highly profitable (and low labor share) firms to command growing market share. Building on Autor et al. (2017), we evaluate and confirm two core claims of the superstar firm hypothesis: the concentration of sales among firms within industries has risen across much of the private sector; and industries with larger increases in concentration exhibit a larger decline in labor’s share.
Sometimes called direct pay, and closely related to concierge care, this sort of business model was once seen as the perquisite of rich folks and medical tourists from foreign lands. But nowadays many of the people seeking cash-based care are middle-class Americans with high-deductible insurance plans. For a patient with an $11,000 family deductible, for example, it might make more sense to seek out a cash-based center like the Premier Medical Imaging facility in Minneapolis, which offers a basic MRI for $499, than to cough up the several thousand dollars that the same procedure generally costs at a traditional hospital. Cash payments don’t count toward a patient’s deductible, but for some it’s worth the gamble.
Why are some people rich while others are poor? To what extent can governments affect inequality? Which instruments should they use? Answering these questions requires understanding why people save. Dynamic quantitative models of wealth inequality can help us understand and quantify the determinants of the outcomes that we observe in the data and to evaluate the consequences of policy reform. This paper surveys the savings mechanisms generated by the transmission of bequests and human capital, by preference heterogeneity, by rates of returns heterogeneity, by entrepreneurship, by richer earnings processes, and by medical expenses. It concludes that the transmission of bequests and human capital, entrepreneurship, and medical expense risk are crucial determinants of savings and wealth inequality.