JSIT20-05: The Unintended Effect of Medicaid Aging Waivers on Informal Care



The need for long-term care is becoming paramount as the population ages. Informal caregivers, often adult children who are 50 years old and above, take up the majority of long-term care responsibilities. Medicaid waiver programs that serve the older population (Medicaid aging waivers hereafter) are the primary program adopted by each state which covers long-term care at home or community-based setting. There is potential for the Medicaid aging waiver to affect informal care because it funds at-home formal care, allowing the older parents to age-in-place. In this paper, I will provide the first empirical work to explore the effect of Medicaid aging waivers on informal care and I will fill the gap by exploring the unique design of this policy. Using the Health and Retirement Study (HRS) data, I will employ the differences-in-differences strategy to compare changes of informal care outcomes for states who change the funding of Medicaid aging waivers versus states who do not. The identification comes from large variation in the timing of policy funding changes across states. The results of this study will have direct relevance in the discussion of containing Medicaid spending on long-term care and designing family leave policies. The findings will provide empirical evidence to guide long-term care policymaking and help internalize the effects on informal care when making long-term care policies.

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