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Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap / Marika Cabral, Neale Mahoney.
- Format:
- Book
- Author/Creator:
- Cabral, Marika.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w19787.
- NBER working paper series no. w19787
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Externalities and Taxation of Supplemental Insurance
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- Most health insurance uses cost-sharing to reduce excess utilization. Supplemental insurance can blunt the impact of this cost-sharing, increasing utilization and exerting a negative externality on the primary insurer. This paper estimates the effect of private Medigap supplemental insurance on public Medicare spending using Medigap premium discontinuities in local medical markets that span state boundaries. Using administrative data on the universe of Medicare beneficiaries, we estimate that Medigap increases an individual's Medicare spending by 22.2%. We calculate that a 15% tax on Medigap premiums generates savings of $12.9 billion annually, with a standard error of $4.9 billion.
- Notes:
- Print version record
- January 2014.
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