Cumulative Expenditures under the ,, Medicare, and Medicaid Programs for a Cohort of Disabled Working‐Age Adults

Objective

To estimate cumulative ,, Medicare, and Medicaid expenditures from initial disability benefit award to death or age 65.

Data Sources

Administrative records for a cohort of new 2000 and awardees aged 18–64.

Study Design

Actual expenditures were obtained for 2000–2006/7. Subsequent expenditures were simulated using a regression‐adjusted Markov process to assign individuals to annual disability benefit coverage states. Program expenditures were simulated conditional on assigned benefit coverage status. Estimates reflect present value of expenditures at initial award in 2000 and are expressed in constant 2012 dollars. Expenditure estimates were also updated to reflect benefit levels and characteristics of new awardees in 2012.

Data Collection

We matched records for a 10 percent nationally representative sample.

Principal Findings

Overall average cumulative expenditures are $292,401 through death or age 65, with 51.4 percent for cash benefits and 48.6 percent for health care. Expenditures are about twice the average for individuals first awarded benefits at age 18–30. Overall average expenditures increased by 10 percent when updated for a simulated 2012 cohort.

Conclusions

Data on cumulative expenditures, especially combined across programs, are useful for evaluating the long‐term payoff of investments designed to modify entry to and exit from the disability rolls.