The mortality effects of changing public funding for home health care: an empirical analysis of Medicare home health care in the United States

In light of population aging, it is important to understand whether limiting public in‐kind transfers to the elderly affects elderly mortality. I focus on home health care—a popular in‐kind transfer—and I exploit variation in the Medicare home health care reimbursement that arose in 1997 in the United States to study whether cuts to government coverage of home health care affected elderly mortality. Under the identifying assumptions of the DID model, I find that the cuts affected total mortality for some men but not women, suggesting that changes in home health care can affect elderly mortality and differences in mortality between men and women. For men aged between 65 and 74, the Interim Payment System was associated with an increase in mortality equal to 0.6%, an effect in absolute value comparable to the mortality response to a one percentage point change in unemployment rates and within the range of other estimates of the impact of health insurance on elderly mortality.