When states endure higher rates of unemployment, they usually incur a higher Medicare spending per capita and increased hospital use by Medicare beneficiaries, according to a study from Health Affairs.
Two economics professors at the College of William and Mary in Williamsburg, Va., conducted a study looking at state-level data from 1991 through 2009. They analyzed several points, including unemployment rates, healthcare spending growth and Medicare spending growth.
The researchers found that recessions, such as that observed from 2007 through 2009, stunted the growth of overall healthcare spending, but Medicare spending actually increased. A 1-percentage-point climb in unemployment was associated with a 0.45-percentage-point increase in Medicare spending growth, whereas higher unemployment rates led to reductions in healthcare spending across all payors.
This led to the question: Why would Medicare use rise during times of higher unemployment? The researchers said a possible explanation could be that before people reach Medicare's eligibility age, they are more likely to postpone medical treatment "because of recession-induced drops in insurance coverage or perhaps even fear of job loss," according to the study.
They also said hospitals and other Medicare providers have "greater capacity, inclination and financial incentive" to treat Medicare patients during recessions because there is less demand from non-Medicare patients.
Two economics professors at the College of William and Mary in Williamsburg, Va., conducted a study looking at state-level data from 1991 through 2009. They analyzed several points, including unemployment rates, healthcare spending growth and Medicare spending growth.
The researchers found that recessions, such as that observed from 2007 through 2009, stunted the growth of overall healthcare spending, but Medicare spending actually increased. A 1-percentage-point climb in unemployment was associated with a 0.45-percentage-point increase in Medicare spending growth, whereas higher unemployment rates led to reductions in healthcare spending across all payors.
This led to the question: Why would Medicare use rise during times of higher unemployment? The researchers said a possible explanation could be that before people reach Medicare's eligibility age, they are more likely to postpone medical treatment "because of recession-induced drops in insurance coverage or perhaps even fear of job loss," according to the study.
They also said hospitals and other Medicare providers have "greater capacity, inclination and financial incentive" to treat Medicare patients during recessions because there is less demand from non-Medicare patients.
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