Affiliation:
1. Boston University and NBER (email: )
2. Harvard University and NBER (email: )
3. Institute for Fiscal Studies and Harvard University (email: )
Abstract
Insurance is typically viewed as a mechanism for transferring resources from good to bad states. However, insurance may also transfer resources from high-liquidity periods to low-liquidity periods. We test for this type of transfer from health insurance by studying the distribution of Social Security checks among Medicare recipients. When Social Security checks are distributed, prescription fills increase by 6–12 percent among recipients who pay small copayments. We find no such pattern among recipients who face no copayments. The results demonstrate that more complete insurance allows recipients to consume healthcare when they need it rather than only when they have cash. (JEL D82, G22, H55, I13, I18, L65)
Publisher
American Economic Association
Subject
Management, Monitoring, Policy and Law,Geography, Planning and Development
Cited by
18 articles.
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