State Unemployment In Recessions During 1991–2009 Was Linked To Faster Growth In Medicare Spending

Health Affairs: 11/1/12

During the US recession of 2007–09, overall health care spending growth fell, but Medicare spending growth increased. Using state-level data from the period 1991–2009, we show that these divergent trends were also observed within states. Furthermore, increases in state unemployment rates were associated with higher Medicare spending per capita and increased hospital use by Medicare beneficiaries. For example, a one-percentage-point point rise in the unemployment rate was associated with a $40 (0.7 percent) increase in Medicare spending per capita. Our results suggest that economic downturns contribute to Medicare spending and use. Read more