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The Affordable Care Act as retiree health insurance: Implications for retirement and Social Security claiming (Gustman et al., 2019)

Absence of conflict of interest. 

Citation

Gustman, A. L., Steinmeier, T. L., & Tabatabai, N. (2019). The Affordable Care Act as retiree health insurance: Implications for retirement and Social Security claiming. Journal of Pension Economics and Finance, 18(3), 415-449.

Highlights

  • The study’s objective was to examine the impact of the Affordable Care Act (ACA) on the probability of retirement, expected age of retirement, and expected age of claiming Social Security benefits. 

  • The authors compared these retirement expectations and outcomes between two cohorts, only one of which was impacted by the implementation of the ACA. The data come from two cohorts of the Health and Retirement Study: the Early Boomer cohort (born between 1948 to 1953) and Mid Boomer cohort (born between 1953 to 1959), each of which were observed for a four-year period.  

  • The study suggested that implementation of the ACA did not affect individuals’ probability of retirement, expected retirement age, or expected age of claiming Social Security benefits.   

  • The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we could not be confident that any estimated effects were attributable to the ACA; other factors are likely to have contributed. However, the study did not find statistically significant effects. 

Intervention Examined

Affordable Care Act (ACA)

Features of the Intervention

The Affordable Care Act (ACA) is a healthcare reform law that aimed to increase the availability and affordability of health insurance. Increasing the availability and affordability of health insurance could affect the retirement decisions of those approaching retirement age. The study examines employed individuals, focusing especially on those with employer-provided health insurance when working but with no employer-provided retiree health insurance to cover them if they retire before age 65. This group should be most affected by the ACA since it could increase their ability to access affordable health insurance if retiring before age 65. 

Features of the Study

The study compared the retirement probabilities, expected age of retirement, and expected age of Social Security claiming between two cohorts, only one of which was impacted by the implementation of the ACA. The data come from two cohorts in the Health and Retirement Study (HRS): Early Boomers, who were born between 1948 and 1953, and Mid Boomers, who were born between 1953 and 1959. The study examines the probability of retiring by 2008 (for Early Boomers) or 2014 (for Mid Boomers) among those who were employed when they were first interviewed (2004 for Early Boomers or 2010 for Mid Boomers). The study also examines change in the expected Social Security benefit claiming or retirement age for those who reported their expectations in the initial and final survey years (2004 and 2008 for the Early Boomers and 2010 and 2014 for the Mid Boomers). For each analysis, the authors compare any changes found between cohorts. The authors argue that the group of individuals most likely to change their retirement behavior due to the ACA are those with employer-provided health insurance that will not continue coverage if the individual retires prior to the age of 65. For this reason, the authors conduct their analysis among three groups--employer provided health insurance when working only, employer provided health insurance on the job and in retirement, and no employer provided health insurance—focusing primarily on the first of these groups.  The sample varies by outcomes, with a sample size ranging from 1,344 individuals to 3,939.  

Findings

Employment

  • The study suggested that the ACA did not change the retirement rate for individuals who had health insurance when working but did not have retiree health insurance. The study also suggested that the ACA did not accelerate individuals’ expected retirement date. 

Public benefits receipt

  • The study suggested that the ACA did not affect the age at which individuals expected to claim Social Security benefits. 

Considerations for Interpreting the Findings

The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we could not be confident that any estimated effects were attributable to ACA; other factors are likely to have contributed.  

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that any estimated effects would be attributable to the ACA; other factors are likely to have contributed. However, the study did not find statistically significant effects. 

Reviewed by CLEAR

December 2022