A Hidden Welfare Cost of Saving Medicare
نویسنده
چکیده
A popular solution to the looming entitlements crisis in the United States is to increase the eligibility age for Medicare. Using an empirical model of insurance choice with endogenous prices, I find that this would have a modest welfare cost. The losses are concentrated among those who lose Medicare coverage. For the non-elderly, the benefit of lower taxes is mitigated by a higher price for medical insurance. JEL Codes: G22, I1, D5
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