Out-of-Pocket Health Expenditures: A Suggested Role for Social Security

Itzhak Zilcha*, Nancy Schneier

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We present economic data to demonstrate that the (random) out-of-pocket health-related expenses of seniors who face medical problems are significant and increasing over time. This remains the case even when we take into account the availability of supplemental health insurance. We propose to apply a modest part of Social Security benefits, without increasing the total expenses of this system, to provide mandatory supplemental health insurance for all recipients. Using a theoretical framework we demonstrate that introducing such additional role for Social Security makes individuals (ex ante) better off and hence results in a Pareto dominating new regime for Social Security.

Original languageEnglish
Pages (from-to)153-164
Number of pages12
JournalRisk Management and Insurance Review
Volume15
Issue number2
DOIs
StatePublished - Sep 2012
Externally publishedYes

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