TY - JOUR AU - Lee,Julie AU - McClellan,Mark AU - Skinner,Jonathan TI - The Distributional Effects of Medicare JF - National Bureau of Economic Research Working Paper Series VL - No. 6910 PY - 1999 Y2 - January 1999 UR - http://www.nber.org/papers/w6910 L1 - http://www.nber.org/papers/w6910.pdf N1 - Author contact info: Julie Lee E-Mail: julielee@nber.org Mark B. McClellan Director, Engelberg Center for Health Care Reform Senior Fellow, Economic Studies Leonard .D. Schaeffer Director's Chair in Health Policy ,The Brookings Institution 1775 Massachusetts avenue, N.W. Washington, DC 20036 Tel: (202) 741-6567 Fax: NA E-Mail: mmcclellan@brookings.edu Jonathan S. Skinner Department of Economics 6106 Rockefeller Hall Dartmouth College Hanover, NH 03755 Tel: 603/646-2535 Fax: 603/646-2122 E-Mail: jonathan.skinner@dartmouth.edu M1 - published as Julie Lee, Mark McClellan, Jonathan Skinner. "The Distributional Effects of Medicare," in James M. Poterba, editor, "Tax Policy and the Economy, volume 13" MIT Press (1999) AB - The Medicare program is now an important source of transfers to elderly and disabled beneficiaries, and will continue to grow rapidly in the future. Because the Medicare program is so large in magnitude, it can have significant redistributional effects. In this paper, we measure the flow of Medicare benefits to high-income and low-income neighborhoods in 1990 and 1995. We find that Medicare spending per capita for the lowest income groups grew much more rapidly than Medicare spending in either high income or middle income neighborhoods. Home health care spending played an important role in the increased spending among the lowest income neighborhoods. To our knowledge, this differential shift in spending has not been documented, yet it exceeds in magnitude the entire per capita transfer from the Earned Income Tax Credit (EITC) and is half of the average transfers to the elderly poor from Supplemental Security Income (SSI). Recent cutbacks in home health care benefits may undo some of this change. Still, this example illustrates how specific technical changes in Medicare policy can have redistributional effects comparable to major and much more visible expenditure and tax policies. ER -