Social Security Benefit Claiming and Medicare Utilization

Published: 2013


Are early Social Security claimers too sick to work? We linked Health and Retirement Study data to Medicare claims to study health care utilization at ages 65 and 70. We find that Social Security Disability Insurance recipients use more health care on average than those who never received DI. At age 65, Medicare spending on SSDI recipients was $4,440 more than spending on retirees who claimed Social Security benefits prior to Full Retirement Age (FRA) and $4,727 more than those claiming at FRA. Differences in Medicare spending persist at all points of the spending distribution. They are robust to a variety of methodological approaches including general linear models, quantile regression, and reweighting, and in specifications limiting comparisons to beneficiaries claiming benefits at initial EEA. Our results suggest that poor health may contribute to EEA claiming decisions, though this group is considerably healthier than those who were too disabled to work and qualified for DI benefits.

Key Findings

    • We use administrative Medicare claims linked to nationally representative Health and Retirement Study data to compare health care utilization at common ages among four groups of Social Security recipients.
    • Social Security beneficiaries claiming prior to their Full Eligibility Age are modestly less healthy than those who delay, but significantly healthier than DI recipients or rejected applicants.
    • Rejected applicants appear more similar to DI recipients than to beneficiaries who never apply for DI benefits, though this difference is attenuated with additional time in Medicare.
    • Our results suggest there could be a modest increase in DI application and receipt in response to increases in the EEA and FRA, though most early claimers would be too healthy for DI.