The Level and Risk of Out-of-Pocket Health Care Spending

Published: 2009
Project ID: UM09-08


Although the level and distribution of out-of-pocket spending for health care are important components in understanding economic preparation for retirement and for the estimation of economic choice models under uncertainty, there has been no systematic evaluation of the quality of data on out-of-pocket spending in data sets such as the HRS. In particular, very large values observed in the data could be due to observation error, yet they have an important influence on our evaluations of economic preparation, economic choice behavior and the desirability of policy intervention. We propose evaluations based on a number of household surveys as well as Medicare data linked to HRS to help understand the true level and risk of out-of-pocket spending on health care. The results should help us understand the quality of economic preparation for retirement.