Conclusion And Policy Implication

Of the existing literature, this is the first paper that specifically studies the causal impact of retirement on medical expenses in the context of China by using a regression discontinuity design. It provides new and essential findings about medical expenses upon retirement, and contributes extensively to the ”retirement-consumption puzzle” literature. In addition, this paper highlights the fact that females and males show different reactions to the financial opportunities that occur with regard to medical care upon retirement. As discussed in the previous section, females show a distinct change in how they utilize health care upon retirement, based on the estimates of total medical expenditures and expenditures that are covered by insurance being significant at the 1% level, and out-of-pocket expenses at the 5% level. Males, however, do not exhibit such a distinct

change in their health-seeking behaviors upon retirement, as indicated by the fact that all of the estimates that appear in Table 6 are insignificant.

This paper also finds that the exogenous increase in the health insurance benefits typically encourages patients to utilize more health care upon retirement. This factor is significant due to the growing concern that overly comprehensive insurance may cause cost growth problems, most notably with regard to the expenditure growth of Medicare. As the government finances both the pension and health insurance system, the basic health care of retirees is big consumption to the government.

The exogenous increase in health insurance benefits upon retirement gives individuals the financial incentive to delay the utilization of their health care until retirement. However, this in­crease in health insurance benefits does not take into account the type or degree of illness that theindividual may be incurring. Patients may be able to delay their health care until they retire in order to save on medical expenses, but the potential decrease in coinsurance rates could encourage patients to postpone receiving essential medical care. Putting off such medical attention may have dangerous consequences for the patients’ health; indeed, delaying certain preventative treatment may put patients at unnecessary risk. A more reliable design might thus be more beneficial for determining the appropriate types of treatment for individuals entering retirement.