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

Author

Listed:
  • Padmaja Ayyagari
  • Frank A. Sloan

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.

Suggested Citation

  • Padmaja Ayyagari & Frank A. Sloan, 2021. "The Impact of Income-Related Medicare Part B Premiums on Labor Supply," ILR Review, Cornell University, ILR School, vol. 74(2), pages 419-442, March.
    • Handle: RePEc:sae:ilrrev:v:74:y:2021:i:2:p:419-442
    DOI: 10.1177/0019793919891973
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