Social Security Benefit Claiming and Medicare Utilization: What Can Health Care Utilization Tell Us about Work Capacity?
*Names in bold indicate Presenter
In order to shed light on both of these issues, we use new data to consider differences in health across DI recipients, applicants and early OASI claimers. 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. Specifically, we compare Social Security Disability Insurance (SSDI) recipients to rejected SSDI applicants, retirees who claimed Social Security benefits prior to Full Retirement Age (FRA), and FRA claimants. We use total Medicare spending at age 65 and age 70 as a measure of health status, with the assumption that higher utilization implies a greater need for health care driven by worse health. Beneficiaries with significant health care needs are less likely to be able to continue working than those who are healthier.
We find that SSDI recipients use more health care on average than those who never received DI. At age 65, Medicare spending on SSDI recipients was $4,440 less than spending on retirees who claimed Social Security benefits prior to Full Retirement Age (FRA) and $4,727 less than those claiming at FRA. Differences in Medicare spending persist at all points of the spending distribution and similarly large in comparisons at age 70. These differences 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.