How Much Does Access to Health Insurance Influence the Timing of Retirement?
Access to health insurance is a known determinant in the decision of
when to retire.
What remains unknown, however, is how much retirement behavior will change in response to
the set of reforms that will be enacted in 2014 with the Patient Protection and Affordable Care
Act (ACA). These reforms include more regulation of
the non-group market, subsidies to health
insurance for the low-to middle-class households, and Medicaid expansions. This project
examines the effect of the state-level reforms that are most similar to those included in the ACA
on the timing of retirement.
We find that non-group health insurance reform
increases the hazard
of leaving the labor force. For workers aged 63, the hazards of exiting the labor force increases by 2.2
doubling the exit hazard at
age. For workers
who report themselves to be in fair or poor health
those most likely to gain
access to the individual market through these regulations, we find that the exit hazard
differentially increases at age 64, and the self-reported retirement hazard also increase at age 62.
These changes in retirement and labor force participation also lead to a hastening of claiming
Social Security at age 63.