ABSTRACT
The strong link between health insurance and employment in the United States may cause workers to delay retirement until they become eligible for Medicare at age 65. However, some employers extend health insurance benefits to their retirees, and individuals who are eligible for such retiree health benefits need not wait until age 65 to retire with group health coverage. We investigate the impact of retiree health insurance on early retirement using employee-level data from 54 diverse firms that are clients of Towers Watson, a leading benefits consulting firm. We find that retiree health coverage has its strongest effects at ages 62 through 64. Coverage that includes an employer contribution is associated with a 6.3 percentage point (36.2 percent) increase in the probability of turnover at age 62, a 7.7 percentage point (48.8 percent) increase in the probability of turnover at age 63, and a 5.5 percentage point (38.0 percent) increase in the probability of turnover at age 64. Conditional on working at age 57, such coverage reduces the expected retirement age by almost three months and reduces the total number of person-years worked between ages 58 and 64 by 5.6 percent.
ABSTRACT
OBJECTIVE: To assess the influence of health risk change on changes in health care costs. METHODS: Multivariate regression models examined change in health care costs concurrent with and following completion of two health assessments (HAs) approximately 1 year apart. Final models examined changes in costs for individuals with and without chronic conditions. RESULTS: After controlling for chronic condition status, health risk changes between the first and second HA were associated with health care cost changes in the year following the second HA. Those with chronic conditions experienced reductions of $129 for each risk reduced and increases of $210 for each risk added. CONCLUSIONS: Changes in health care costs were preceded by changes in health risk status, supporting the use of HA and biometric screening measures as leading indicators of the cost impact of health management programs.
