Title: A tax on work for the elderly
First published: 2007
Description: "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"--National Bureau of Economic Research web site.
Subjects: Health Insurance, Insurance, Health, Law and legislation, Medicare
Places: United States