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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.

Since 2008, when Colombia ratified the Framework Convention for Tobacco Control, available evidence of the impact of tobacco consumption, its health effects, and low tax revenues resulting from low tobacco taxation and prices had grown. By 2015, Colombia's cigarette prices stood higher than only one other country in the region, and smoking had become the second leading modifiable risk factor for premature mortality. At that time, reduced fiscal revenues resulting from a sharp drop in oil prices, accompanied by growing demand for government spending arising partly from a change in legislation that increased health benefits for the lower socioeconomic population, led to a call for tax reform. The preparation of the document was accompanied by technical training, studies, and public fora with national and international experts, civil society, and academia presenting evidences and arguing for increased taxation to lead to a reduction in tobacco consumption and, in the future, a reduction in costs to the health system. The fora and open dialogue helped align strategies of the Ministry of Health and Social Protection, and the Ministry of Finance in presenting the reform to Congress for approval with a larger academic and civil society support for this measure. In December 2016, resulting from the above-mentioned efforts, Colombia passed a major tax increase on tobacco products with the goal of decreasing smoking and improving population health. While tobacco taxes are known to be highly effective in reducing the prevalence of smoking, they are often criticized as being regressive in consumption. This analysis attempts to assess the distributional impact (across income quintiles) of the new tax on selected health and financial outcomes.

For the poorest of our world, non-communicable diseases and injuries (NCDIs) account for more than a third of their burden of disease; this burden includes almost 800000 deaths annually among those aged younger than 40 years, more than HIV, tuberculosis, and maternal deaths combined. • Despite already living in abject poverty, between 19 million and 50 million of the poorest billion spend a catastrophic amount of money each year in direct out-of-pocket costs on health care as a result of NCDIs. • Progressive implementation of affordable, cost-effective, and equitable NCDI interventions between 2020 and 2030 could save the lives of more than 4·6 million of the world's poorest, including 1·3 million who would otherwise die before the age of 40 years. • To avoid needless death and suffering, and to reduce the risk of catastrophic health spending, essential NCDI services must be financed through pooled, public resources, either from increased domestic funding or external funds. • National governments should set and adjust priorities based on the best available local data on NCDIs and the specific needs of the worst off. • International development assistance for health should be augmented and targeted to ensure that the poorest families affected by NCDIs are included in progress towards universal health care.