Cover: Does Medicare Benefit the Poor?

Does Medicare Benefit the Poor?

Appendix

Published Jun 21, 2005

by Jay Bhattacharya, Darius N. Lakdawalla

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Previous research has found that Medicare benefits flow primarily to the most economically advantaged groups and that the financial returns to Medicare are consequently higher for the rich than for the poor. Taking a different approach, this study finds very different results. According to the Medicare Current Beneficiary Survey, the poorest groups receive the most benefits at any given age. In fact, the advantage of the poor in benefit receipt is so great that it easily overcomes their higher death rates. This leads to the result that the financial returns to Medicare are actually much higher for poorer groups in the population and that Medicare is a highly progressive public program. These new results appear to owe themselves to the authors' measurement of socioeconomic status at the individual level, in contrast to the aggregated measures used by previous research.

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