Housing in Medicaid: Should it Really Change?
- American Economic Journal: Economic Policy (Forthcoming)
Housing is mostly exempted from Medicaid and Supplemental Social Insurance means tests. Reforms of this special treatment have
been debated but little is known about its costs, benefits and redistributive implications. I estimate a life-cycle model of single retirees accounting for this exemption. It shows that the homestead
exemption explains important patterns of Medicaid recipiency and
that it is highly valued. It also shows that estate recovery could
cover most of its costs with possibly limited negative welfare consequences. Finally, the model predicts that removing the homestead
exemption or enforcing estate recovery programs would reduce redistribution towards lower-income retirees.
Forthcoming Article Downloads