Health Insurance Is Healthy: An Effect of Obtaining Medicare on Self-Rated Health

Abstract

I examine the causal effect of health insurance on self-rated health in the short run, based on a concept of the fuzzy regression discontinuity(RD) research design with the age of 65 as an instrumental variable. To focus on the causal effect of obtaining Medicare, I limit the sample to those without private insurance around the age of 65 - the Medicare eligibility starting age. First, the result shows that the proportion of those covered by health insurance increases by about 27 percentage points at that age. Second, the self-rated health of those newly covered by health insurance at the age of 65 improves. Third, although there is no discrete change in health care services, including surgery and inpatient service, elderly individuals increase their use of preventive care services. These results suggest that obtaining health insurance strengthens the assurance about getting medical and preventive care services and results in better self-rated health.