TY  - JOUR
AU  - Goda,Gopi Shah
AU  - Shoven,John B.
AU  - Slavov,Sita Nataraj
TI  - A Tax on Work for the Elderly: Medicare as a Secondary Payer
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13383
PY  - 2007
Y2  - September 2007
UR  - http://www.nber.org/papers/w13383
L1  - http://www.nber.org/papers/w13383.pdf
N1  - Author contact info:
Gopi Shah Goda
Stanford University
SIEPR
366 Galvez St.
Stanford, CA 94305
Tel: 650/736-0480
Fax: 650/723-8611
E-Mail: gopi@stanford.edu

John B. Shoven
Department of Economics
579 Serra Mall at Galvez Street
Stanford, CA 94305-6015
Tel: 650/723-3273
Fax: 650/723-8611
E-Mail: shoven@stanford.edu

Sita Slavov
Department of Economics
Occidental College
1600 Campus Road
Los Angeles, CA 90041
Tel: 323/259-1461
E-Mail: sslavov@oxy.edu
AB  - 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.
ER  -