age groups. The self-employed, however, do not warrant special methods for assessing their medical care risk.

FINDINGS FROM THE HEALTH AND RETIREMENT STUDY ON CHANGES OVER TIME ON HOW THE ELDERLY FINANCE MEDICAL CARE

Michael Hurd (RAND) introduced himself as a coprincipal investigator on the Health and Retirement Study (HRS), with overall charge of the income and asset sections. After a brief background on HRS, Hurd explained how the survey assesses out-of-pocket medical spending and how those data compare with data from MEPS and the Medical Care Beneficiaries Survey (MCBS). He illustrated the application of HRS data to explain economic preparation for retirement with and without health care spending risk.

Background on HRS

The HRS is a very large survey aimed at people over age 50. It has interviewed about 20,000 persons every 2 years in panel since 1992. So by now it has 10 waves of information on the original sample. New cohorts were added in 1998, 2004, and 2010, filling out the population age 51 and older plus spouses.

Although the initial sample was drawn from the community, respondents are followed into nursing homes. After a few years, it is representative of the entire population, including the nursing home population, depending on mortality, condition, and nursing home status.

The HRS goes to considerable effort to measure income and wealth, including pensions, and those techniques have been refined over time because at older ages wealth is more important than income. HRS data matches the Survey of Consumer Finances quite closely, except at the very top, and that is because of the oversamples of the Survey of Consumer Finances from the high income supplement. It also matches the Current Population Survey (CPS) income data very well, and it is linked to Social Security records.

Additional content in the HRS covers a wide range of topic areas. The main ones of relevance for this session are health conditions, including cognition, the use of health care services, out-of-pocket spending for health care services, and formal and informal care (who gives care, family member or paid help, and out-of pocket cost if paid). These data are linked at the individual level to Medicare data.

Out-of-Pocket Spending

Out-of-pocket spending is assessed in the HRS core interview by first asking about the use of services and then if the costs were paid by insurance.



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