Absence of conflict of interest.
Coe, N. B., & Goda, G. S. (2015). How much does access to health insurance influence the timing of retirement? (SIEPR Discussion Paper No. 14-007). Stanford, CA: Stanford Institute for Economic Policy Research. City, ST: Publisher.
- The study examined the impact of state-level reforms of health insurance on early retirement and Social Security retirement benefit claims.
- The authors used 1996–2010 data from the Health and Retirement Study (HRS) and statistical models to compare the outcomes of individuals in states with state-level reforms of health insurance with those in non-reform states.
- The study found that employed individuals in states with non-group health insurance reform were significantly more likely to retire at age 63.
- The quality of causal evidence presented in this report is low because the authors did not demonstrate that individuals in states with state-level reforms of health insurance were similar to those in non-reform states. This means we are not confident that the estimated effects are attributable to the non-group health insurance reform; other factors are likely to have contributed.
Retiree Health Insurance
Features of the Intervention
In the United States, most workers receive their health insurance through their employers before becoming eligible for Medicare at age 65. The availability of retiree health insurance increases the odds of early retirement before age 65. The private (non-group) health insurance market is often regulated at the state level. This study examined the impact of state-level reforms that are most similar to those included in the Patient Protection and Affordable Care Act (ACA) on workers’ decisions to retire before age 65 and on claiming of Social Security. The state-level reforms examined included two of the most common regulations of the non-group health insurance market: guaranteed issue, where individuals cannot be rejected for health insurance; and community rating, where the price of an insurance policy cannot be based on individual health characteristics, but only on certain demographic information. Individuals in states with strictly regulated health insurance markets might have access to more affordable insurance rates and, therefore, choose to retire early.
Features of the Study
The study relied on 1996–2010 data from the HRS, a biennial household survey, merged with data on the timing and presence of state-level health insurance regulations. The authors used a statistical model to compare the outcomes of individuals in states with strict regulations (defined as having either guaranteed issue or community rating regulations) to individuals in states without these regulations. The sample included 119,422 person-month observations from employed individuals ages 60 to 65, and analyses of Social Security claiming were limited to those who were at least 62. Of those, 12,560 person-month observations were from strictly regulated states at least some of the years during the 1996–2010 period. The majority of individuals in the sample were female (54 percent), 14 percent were black or African American, and 8 percent were Hispanic.
- The study found that at age 63, employed individuals in states with strict regulations were significantly more likely to exit the labor market than those in other states. There was no statistically significant relationships between non-group health insurance reform and self-reported retirement.
- The study found no statistically significant relationships between non-group health insurance reform and Social Security retirement benefit claims.
Considerations for Interpreting the Findings
The survey was administered every two years, so the timing of measurement for control variables could be anywhere from one month to two years before the outcome. Although the authors controlled for the average hourly earnings, this variable was not necessarily measured a year before the time of the outcomes being measured. Therefore, the existing employment differences between the group in states with state-level reforms and the group in non-reform states could explain the observed differences in outcomes.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not demonstrate that individuals in states with state-level reforms of health insurance were similar to those in non-reform states. This means we are not confident that the estimated effects are attributable to the non-group health insurance reform; other factors are likely to have contributed.