Retirement Reversals and Health Insurance

Abstract

This article uses the longitudinal aspect of the Health and Retirement Study to explore the characteristics associated with reversals in retirement (referred to here as “unretirement”). Through the use of survival-time analysis with time-variant covariates, this article shows that health insurance status and its source are significant predictors of unretirement decisions. The relationship is important, as the potential impacts of the Affordable Care Act (ACA) are considered. The analysis finds that insurance is equally as predictive of retirement reversals as other financial explanations such as pensions and wealth at retirement. The analysis also shows that health insurance sources play a particularly predictive role for early retirees and those who were previously open to the idea of working in retirement. Rough estimates suggest that the ACA might reduce the number of reversals by between two and four percentage points, which would translate to 80,000 and 170,000 retirees annually.