Do Health Problems Reduce Consumption at Older Ages?

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Out-of-pocket medical costs can be substantial at older ages, even for those receiving Medicare benefits, and might limit spending on other goods and services. There is much anecdotal evidence that some older Americans are forced to choose between buying medications and paying for rent or groceries, for example, but there are no empirical studies of how the onset of health problems affects living standards. This project will measure the impact of health problems at older ages on out-of-pocket health care spending and other types of household expenditures. Data will come from the HRS, including the Consumption and Activities Mail Survey (CAMS) supplement.