The Impact of Income-Related Medicare Part B Premiums on Labor Supply

Padmaja Ayyagari and Frank Sloan

ILR Review, 2021, vol. 74, issue 2, 419-442

Abstract: The 2003 Medicare Modernization Act introduced income-related premiums on Medicare coverage for professional services (Part B) for the first time. Beginning in 2007, higher-income households were required to pay higher premiums for Part B coverage, which raises the price of Medicare relative to employer-sponsored health insurance for these households. The authors exploit this exogenous change in Medicare policy to examine the impact of Part B premiums on the labor supply decisions of older adults. They find that higher Medicare premiums delay retirement. Findings have important implications for Medicare policy and labor markets.

Keywords: Medicare Part B; insurance premiums; retirement; instrumental variable; means testing (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:74:y:2021:i:2:p:419-442

DOI: 10.1177/0019793919891973

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