A Tax on Work for the Elderly: Medicare as a Secondary Payer / Gopi Shah Goda, John B. Shoven, Sita Nataraj Slavov.

Format:

Book

Author/Creator:

Goda, Gopi Shah.

Contributor:

National Bureau of Economic Research.

Shoven, John B.

Slavov, Sita Nataraj.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13383.

NBER working paper series no. w13383

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

A Tax on Work for the Elderly

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

Medicare as a Secondary Payer (MSP) legislation requires employer-sponsored health insurance to be a primary payer for Medicare-eligible workers at firms with 20 or more employees. While the legislation was developed to better target Medicare services to individuals without access to employer-sponsored insurance, MSP creates a significant implicit tax on working beyond age 65. This implicit tax is approximately 15-20 percent at age 65 and increases to 45-70 percent by age 80. Eliminating this implicit tax by making Medicare a primary payer for all Medicare-eligible individuals could significantly increase lifetime labor supply due to the high labor supply elasticities of older workers. The extra income tax receipts from such a policy would likely offset a large percentage of the estimated costs of making Medicare a primary payer.

Notes:

Print version record

September 2007.