High out-of-pocket health care costs may have serious repercussions for older people and their families. This paper examines the impact of health problems at older ages on out-of-pocket health care spending and other types of expenditures. The results show that medical conditions increase health spending, particularly for households ages 51 to 64, but do not generally reduce nonhealth spending. Health conditions do, however, reduce nonhealth spending for low-income households ages 51 to 64, suggesting that holes in the health safety net before the Medicare eligibility age force some low-income people to lower their living standards to cover medical expenses.
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