Appendix E: Medicare Dependence and Health Status

From Planning for the Future
p. 95-96, published 2002

Model Specification

The estimated percentages shown on page 31 are based on the relationship between Medicare dependence and health status of Kentucky retirees while holding a number of other socioeconomic and demographic factors constant. (See Table E.1 for a crosstabulation between standard of living and “dependence” on Social Security.) We used a probit model to estimate the relationship between the dependent variable and several independent variables. The dependent variable is the respondent’s self-assessment of his or her overall health status. The actual question is: How would you describe your health in general?: (1) excellent; (2) very good; (3) good; (4) fair; or (5) poor. We collapsed the dependent variable into two categories so that “fair” or “poor” equals one and “excellent,” “very good,” or “good” equals zero. The independent variables in the model are listed below, along with parameter estimates in Table E.2 and a correlation matrix in Table C.3:

METROCO — This dichotomous variable is equal to 1 if the individual lives in an urban county and 0 for a rural county. We used Beale Codes to categorize the respondent’s county. If the county is designated as “0” through “3” then METROCO equals 1. Otherwise, if the Beale Code is equal to 4 through 9 then METROCO equals 0.

MEDMAJ — This variable equals 1 if Medicare is the most important source of health care in retirement and 0 otherwise.

GENDER — This dichotomous variable is equal to 1 for males and 0 for females.

Q2INC, Q3INC, Q4INC, MISINC — These dichotomous variables reflect if the individual’s total household income from all sources before taxes is in the second, third, fourth quartile, or missing. The first quartile is left out of the model and is therefore the comparison group. The variable equals 1 if the individual’s income falls in the quartile (or is missing in the case of MISINC) and 0 if it does not. The variable Q1INC equals 1 if income is between “none” and $14,999. The variable Q2INC equals 1 if income is between $15,000 and $29,999. The variable Q3INC equals 1 if income is between $30,000 and $49,999. The variable Q4INC equals 1 if income is $50,000 or higher.

SOMEPSE — The survey respondents were asked to please circle the last grade in school you completed. SOMEPSE equals 1 if they circled “1 or 2 years college, no degree,” “graduated junior or community college,” or “vocational/technical degree.”

BAorMORE — The survey respondents were asked to please circle the last grade in school you completed. If they circled “bachelor’s degree,” “some graduate school work,” or “graduate degree (ex: MA, MS, PhD, JD)” then BAorMORE equals 1.

AGED 45-54, AGED 55-64, and AGED 65-74 — Dichotomous variables that equal 1 if the respondent is aged 45 to 54, 55 to 64, and 65 to 74, respectively, and 0 otherwise. The reference group are those respondents aged 75 and older.

CURRSMKR — A dichotomous variable that equals 1 if the respondent has smoked at least 100 cigarettes in his or her lifetime AND has smoked in the last 30 days, and 0 otherwise.

Table E1:  Crosstabulation Between Health Status and Medicare Dependence

Table E2:  Estimating Health Status of Retirees, Parameter Estimates

To view a list of all chapters in this book, click here.  To read the chapters in sequential order, please follow the arrows below.

  Back to Appendix D: Satisfaction with Elder-Care Services

  Ahead to Appendix F: Physical Functioning Models