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Economic Hardship and Medicaid Enrollment in Later Life: Assessing the Impact of Disability, Health, and Marital Status Shocks

Publication Date

Richard W. Johnson and Melissa M. Favreault

Urban Institute

January 2021

Link to HTML Version (50 PDF pages)

ABSTRACT: This report assesses the financial security of older adults and examines the role that disability, health, and marital shocks play in economic hardship in later life. We review past studies of retirement security and then use the Urban Institute's Dynamic Simulation of Income Model 4 (DYNASIM4) to project economic well-being after age 65 for adults born between 1941 and 1975. We also focus on enrollment in Medicaid, which is available only to people with very limited financial resources. We show how economic hardship and Medicaid enrollment vary with the prevalence and duration of serious LTSS needs, the receipt of LTSS, widowhood, and divorce and how these relationships differ across the distribution of lifetime earnings.

This report was prepared under contract #HHSP233201600024I between HHS's ASPE/BHDAP and the Urban Institute. For additional information about this subject, you can visit the BHDAP home page at or contact the ASPE Project Officers, at HHS/ASPE/BHDAP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C., 20201;,,

DISCLAIMER: The opinions and views expressed in this report are those of the authors. They do not reflect the views of the Department of Health and Human Services, the contractor or any other funding organization. This report was completed and submitted in March 2020.