by Yaa Akosa Antwi, Indiana University
In recent years, there has been increasing concern about the financial stability of the Social Security and Medicare funds. The custodians of the two funds have warned that without legislative action to address imminent financial shortfalls, it is very likely that the Federal government will not be able to fulfill its financial responsibilities to the elderly in the coming years. Several proposals have called for reductions in the Social Security income received by beneficiaries. These proposals might be misguided if reducing Social Security income leads to increases in the use of other costly Federal programs such as Medicare. Given that the causal relationship between income and the use of medical care is not well understood, research that provides empirical evidence of the link between the two is important.