Medicare Expenditures, Social Security Reform, and the Labor Force Participation of Older Americans

Published: 2015
Project ID: UM15-13


Changes to the Social Security Old Age benefits system introduced in the last decade have likely impacted individuals’ retirement decisions, and therefore their health insurance coverage. If a large proportion of older Americans decide to work in jobs covered by employer-provided health insurance, and then either delay their enrollment in Medicare or decide to enroll in Medicare as their secondary payer, the expenditures paid by Medicare will likely be lower on average. We propose to analyze the effects of the Social Security old age benefits changes on Medicare costs. Using data from the Medicare Current Beneficiary Survey (MCBS) and Health and Retirement Study (HRS) we will empirically and econometrically analyze the evolution of the Medicare expenditures of individuals around retirement age as a function of their health insurance coverage and labor market attachment. We then propose to estimate a life-cycle model of labor supply, Medicare enrollment decisions and Social Security claiming decisions in order to study the effects of future reforms to the Social Security system and the ACA, on Medicare costs.


Hugo Benítez-Silva