This paper develops an overlapping generations model to study the macroeconomic effects of an un-expected elimination of Medicare. We find that a large share of the elderly respond by substituting Medicaid for Medicare. Consequently, the government saves only 46 cents for every dollar cut in Medicare spending. We argue that a comparison of steady states is insufficient to evaluate the welfare effects of the reform. In particular, we find lower ex-ante welfare gains from eliminating Medicare when we account for the costs of transition. Lastly, we find that a majority of the current population benefits from the reform but that aggregate welfare, measured as the dollar value of the sum of wealth equivalent variations, is higher with Medicare.

中文翻译：

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医疗保险的宏观经济影响。

本文建立了一个重叠的世代模型，以研究意外淘汰医疗保险的宏观经济影响。我们发现，很大一部分老年人通过用Medicaid代替Medicare来做出反应。因此，政府每削减1美元的Medicare支出，便只能节省46美分。我们认为，比较稳定状态不足以评估改革的福利效果。特别是，当我们考虑过渡成本时，我们发现取消Medicare会带来较低的事前福利收益。最后，我们发现，目前的大多数人口都从改革中受益，但总医疗福利（以等值的财富总和的美元价值衡量）在Medicare中更高。