Early Death Cuts Smokers' Lifetime Medicare Claims: Researchers

Researchers have come up with a new strategy for analyzing the effects of smoking on smokers’ lifetime Medicare spending.

The researchers, Michael Darden and Robert Kaestner, say their work suggests that smokers do little to increase Medicare spending over the course of their lifetimes.

Most of the serious, costly health effects of smoking show up when people are already eligible for Medicare, and smokers’ short life expectancy offsets their high annual levels of health care spending from age 65 through age 84. the researchers write.

The researchers note that Medicare spending on former smokers is very high.

Costs for former smokers are high because former smokers tend to live longer than current smokers, and because many former smokers stopped smoking after they learned that they already had serious, expensive-to-treat, smoking-related health problems, the researchers say.

What It Means

The Darden-Kaestner study could give retirement planners ideas about new ways to analyze the effects of smoking on clients’ income needs, for health-related costs and other costs, over the course of their retirement.

The study could also give planners ideas about how to analyze the effects of other long-lasting forces or behaviors that could affect a client’s annual and lifetime spending and might also affect the client’s life expectancy.

A client who exercised regularly, for example, might have a higher-than-average life expectancy, with lower-than-average annual health care costs but higher-than-average spending on preventive care, and higher-than-average lifetime health care spending, because of the client’s healthy habits and long lifespan.

The Researchers

Darden is a researcher with the Johns Hopkins business school, and Kaestner is a researcher with the University of Chicago public policy school.

They published their analysis in the form of a working paper on the website of the National Bureau of Economic Research.

A working paper is an academic paper that has not yet gone through a full review process by other researchers in the field.

The Methods

The researchers linked information about participants in the federal government’s National Health Interview Survey program with Medicare claim data for the same individuals.

The researchers contend that current smokers, smokers and people who have never smoked may be different in many hard-to-detect ways.

Most similar studies simply compare all smokers with all nonsmokers.

Darden and Kaestner were able to use their data set to compare medical utilization levels of smokers, former smokers and nonsmokers at specific ages, and they were able to analyze health care usage patterns and calculate lifetime Medicare spending totals for each participant.

The researchers found, for example, that people who smoked when they participated in the National Health Interview Survey used less preventive and outpatient care than other survey participants but eventually used more inpatient hospital care.

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