post by Bill Gardner
Most of us begin life with excellent health but -- breaking news! -- it declines over time. As it does, we have increasing needs for health care. However, some people get sick faster as they age, and hence are likely to need more health care sooner. This needs to be considered in the debate about raising the age of eligibility for Medicare.
Here is a graph from Anne Case and Angus Deaton of data from the National Health Interview Survey. The horizontal axis is the age of the person being interviewed. The vertical axis is self-reported health status (SRHS), running (confusingly!) from Excellent at the bottom to Poor at the top. This means that a rising curve means declining health. Please keep this in mind in what follows.
Nevertheless, the pattern in the graph is clear. The top lines are the SRHS of women and men in the lowest income quartile, and the bottom lines are SRHS from the highest income quartile. If you are in the lowest quartile, you enter the work force with less health than those in the highest quartile. Moreover, as you age, your health declines more rapidly than someone in the highest quartile. The largest income-related difference in SRHS is at age 60.
So, people in the lowest income quartile need health care at younger age than do those in the highest income quartile. They are also likely to have to pay more for their health care as a percentage of their income. Finally, despite Medicaid, having less income means you are less likely to be insured (see the bar chart to the right, based on 2009 data from the U.S. Census). The point, then, is that a reduction in the age at which you qualify for Medicare will hurt those in the lowest income brackets much harder than those in the upper brackets, because they need health care at a younger age, they have to pay more of their income for health care, and they are less likely to have other health insurance.
Important caveat: The Case-Deaton graph doesn't quite show the life course paths people take, because of a problem called age-period-cohort confounding. This means, among other things, that older people have less health than younger people both because they are older, and because they were young in a (possibly) less healthy historical era. For example, if early childhood nutrition was worse in 1940 compared to 1990, that may have adversely shaped the development of a person who is 70 and in poor health today.