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Division of Health Policy and Management, Mailman School of Public Health, Columbia University, 6th Floor, 168th Street, 600 West, New York, NY 10032, USA. sag1@columbia.edu
The cost of expanding health insurance coverage increases when people who would otherwise purchase insurance obtain public coverage. This paper investigates the effects of one of the first efforts to target insurance benefits to the most needy, the 1982 medicare as secondary payer (MSP) provisions. We find strong evidence of low compliance with the MSP both in terms of medical bill payments (payment compliance) and employer-sponsored insurance coverage (coverage compliance). We estimate payer compliance at approximately 33%. Coverage compliance is lower, at under 25%. We find weak evidence that the MSP caused older workers to shift toward MSP-exempt jobs.
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