Association for Public Policy Analysis & Management

As the nation's largest health insurer, Medicare program provides coverages on both physical and mental health issues to over 100 million Americans per year. Although the impacts of Medicare on individuals’ health care services utilization and physical health improvements have been well studied, the influence of Medicare on older adults’ mental health is poorly understood. Understanding of mental health is important as older adults tend to suffer more from depression, stress, and other mental health problems given fragility of their physical health. Untreated older adults’ mental health problems can lead to fatigue, illness, and even suicide. In this paper, I study the effects of Medicare on older adults’ mental health using nationally representative health survey data. To answer this question, I leverage the eligibility criteria of Medicare at age 65. Specifically, I follow Card, Dobkin, and Maestas (2008) in using a regression discontinuity design (RDD) that compares the mental health of older adults right below 65 who are not eligible to receive Medicare to those who just above 65 and eligible for Medicare. I also leverage a difference-in-difference (DD) strategy that includes those who have employer-sponsored insurance plan below and above 65 as additional control groups. The data used for this research come from six waves of nationally representative repeated cross-sectional National Health and Nutrition Examination Survey (NHNES) from 2001 to 2012. NHNES provides detailed measurements of older adults’ mental health, insurance, demographic and socioeconomic information for all age group. By studying older adults’ mental health, this paper identifies the causal impacts of Medicaid on older adults’ mental health and extends current understanding of Medicare program.