At age 65, all Americans become eligible for Medicare. In a new study, Yale SOM’s Paul Goldsmith-Pinkham and his co-authors use this sudden transition to test whether universal health coverage can help reduce racial disparities in health.
The predominantly White neighborhood of Streeterville in Chicago, nestled along Lake Michigan, boasts an average life expectancy of 90 years. Nine miles to the southwest is the predominantly Black neighborhood of Englewood—where residents live, on average, to be 60. That’s the largest life expectancy gap within a U.S. city. But it’s emblematic of racial and ethnic inequities that pervade the U.S. healthcare system.
One factor contributing to these disparities is the racial gap in insurance coverage. In 2019, according to an analysis of data from the American Community Survey, 9% of adult White Americans under age 65 were uninsured, while 14% of Black Americans and 26% of Hispanic Americans were. Could expanded coverage reduce disparities in health outcomes?
In a recent study, Yale SOM’s Paul Goldsmith-Pinkham and his co-authors used the firm cutoff of Medicare eligibility, which begins at 65 years old, to investigate this question.
“Conceptually, the idea was to look into the impact of Medicare eligibility on disparities in health by comparing Americans who are on one side of the threshold—64 years old—with those on the other, who are 65 and older,” he says. “Because Medicare is a benefit that universally hits everyone, it gives us a control and a treatment to examine.”
The team found that once Medicare becomes available, racial and ethnic gaps in healthcare access and self-reported health start to close, suggesting that expanded access to Medicare or other universal health insurance could put a dent in these disparities.
Goldsmith-Pinkham and his colleagues, Jacob Wallace and Karen Jiang from Yale and Zirui Song from Harvard, looked at how access to Medicare mapped on to three dimensions of healthcare across White, Black, and Hispanic populations. First, they looked at how rates of insurance coverage changed. Second, they studied access to care, meaning whether survey respondents had a regular source of care, whether cost of care was a barrier, and whether they received an influenza vaccine. Third, they looked at self-reported health as well as mortality between the ages of 51 and 79.
The results showed that the availability of Medicare helps mend disparities in access to healthcare between White populations and Hispanic and Black populations. For instance, an average of 92% of White respondents had insurance before Medicare, and 98% after. For Black respondents, the numbers moved from 86% to 95%, and for Hispanic respondents from 77% to 91%.
“It was astonishing to see how big these gaps were for Hispanic Americans,” Goldsmith-Pinkham says—and how much Medicare did to reduce them. For instance, Medicare was associated with a 39% smaller disparity in the share of White and Hispanic people unable to see a physician because of cost, and a 59% smaller disparity in influenza vaccination rates among White and Hispanic people. “We still see a really significant difference for the Black-White gap, but where we see the biggest jumps in our data is comparing Hispanic and White populations.”
Access to Medicare also decreased the racial gap in self-reported health. The percentage reporting “poor” health went from 14.8% to 11% for Hispanic respondents and from 10.3% to 7.7% for Black respondents, while staying essentially flat for White respondents. But turning 65 and getting access to Medicare did not close the racial gap in mortality.
Finally, the researchers also broke the data down at the state level to see if particular parts of the country were driving their results. The goal was to differentiate between two possible explanations for the findings. One possibility is that Medicare provides a disproportionate value in states with poor health insurance coverage, and more Black and Hispanic Americans happen to live in these states. Another is that the results are general across all states, and therefore specifically tied to race and ethnicity.
“Going into the study, we thought that this would be a regional thing, and that the effects would be more concentrated in places that had historically high levels of racial animus, and lower levels of support for public insurance programs,” Goldsmith-Pinkham says. They found instead that the gaps in care were reduced across the board. “So while there may be smaller absolute differences in a state like Massachusetts, the relative gap in insurance coverage and access to care between Black and White, and Hispanic and White, drops after Medicare eligibility no matter where you are. That was surprising to us.”
The results illuminate what Goldsmith-Pinkham and his coauthors call “an underappreciated aspect of Medicare”: The program is associated with sharp reductions in racial and ethnic healthcare disparities after age 65. These gaps don’t disappear completely, they note—there are many disparities in the healthcare system beyond insurance coverage—but the findings are suggestive of how expanded access to Medicare could help to advance health equity in the U.S.
“These relative gaps across race and ethnicity are persistent in this country,” Goldsmith-Pinkham says. “More access to insurance appears to narrow these gaps, and expanding Medicare is one way to provide this access.”
Yale Insights is produced by the Yale School of Management.
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