The Role of Health and Healthcare Delivery in Elderly Well-Bein

This dissertation explores the role of health and healthcare delivery for the well-being of individuals in retirement. The summary section provides an introduction to the themes explored throughout this dissertation. Chapters 1 and 2 consider public policies regarding long-term care delivery methods. The final chapter, chapter 3, explores how employer-provided retirement benefits and health interact to influence the retirement behavior and impact the well-being of the older population.;This dissertation explores two important decisions facing older individuals- long-term care choices and retirement decisions. The findings in this dissertation are relevant to understanding the role of health status and public healthcare programs in well-being of the elderly. These will also help inform policy decisions regarding public provision of long-term services and design of policies incentivizing later retirement.;Expanding funding for home-and-community-based services has become a key priority for state Medicaid programs. Chapter 1 examines the impact of Medicaid home-and-communitybased care policies on long-term care utilization. Particularly, I exploit variation in the timing of implementation of Personal Care Services (PCS) benefit and home-and-community-based services (HCBS) elderly waivers between the period 1984 and 2004. Using six waves of the National Long- Term Care Survey, I find that living in a state with the Personal Care Services (PCS) benefit leads to a small reduction in nursing home utilization but induces a relatively larger decrease in informal care use. These results suggest Medicaid costs could increase under the PCS benefit as the program expands access to those previously relying on informal care. Home-and-community-based services (HCBS) elderly waivers reduce nursing home utilization for individuals with high long-term care needs but increase their informal care use. This suggests that formal home-and-community-based care is likely to be complementary to informal care at higher levels of disability.;The second chapter studies the effects of a more recent policy to expand home-andcommunity- based services on formal care utilization of the elderly. I investigate the impact of the Money Follows the Person (MFP) grants awarded to states under the DRA on utilization of formal care among the elderly. Using claims data from the Medicare Current Beneficiary Survey, I find that enhanced federal funding for Medicaid home-and-community-based programs leads to modest reduction in nursing home use. On the other hand, there is a significant increase in utilization of home-and-community based services. In addition, I do not find any effect on the utilization of other formal care such as inpatient and outpatient services under both Medicaid and Medicare programs.;The third chapter studies how own and spouse's health interact with financial incentives embedded in pensions to determine retirement among public sector workers. One solution to the increased concerns regarding sustainability of Social Security and defined benefit pensions is to increase eligibility age under these programs. However, workers in poor health may not be able to work longer or may be less sensitive to financial incentives to extend working life. For this purpose, I use a panel dataset that combines administrative records and survey responses for public sector workers in North Carolina. Estimates using pension eligibility for unreduced benefits fail to find a significant difference in responsiveness to financial incentives by health status. However, using peak value incentive that measures financial gain of working until optimal retirement age, I find that individuals in poor health are more responsive to financial incentives. These findings suggest that the concern regarding success of policies incentivizing later retirements through changes in pension or Social Security incentives may be misplaced.