The Agenda

Will Obamacare-Induced Early Retirement Make Us Healthier?

Last week, Jay Carney, the White House press secretary, released a brief statement on the CBO’s new analysis of the labor market impact of the Affordable Care Act, which included the following passage:

What the CBO report does find is one key immediate effect of the Affordable Care Act is to “induce some employers to hire more workers or to increase the hours of current employees” during the 2014-16 period. Over the longer run, CBO finds that because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families. At the beginning of this year, we noted that as part of this new day in health care, Americans would no longer be trapped in a job just to provide coverage for their families, and would have the opportunity to pursue their dreams. This CBO report bears that out, and the Republican plan to repeal the ACA would strip those hard-working Americans of that opportunity.

Carney refers to “retiring on time rather than working into their elderly years,” yet it’s not clear exactly what he means. “Retiring on time” will mean different things to different people. The Medicare eligibility age is 65, and Obamacare did not lower the Medicare eligibility age, so one has to assume that Carney believes that for many Americans “retiring on time” means retiring before 65. This is not an unreasonable claim in itself, as some occupations are more taxing than others. Yet we know that older Americans are more likely to receive disability benefits. The aging of the U.S. population is one reason why the number of Americans receiving disability benefits has increased in recent years. So people who are physically incapable of working have the option of applying for disability benefits, and those with the most serious maladies have a decent chance of securing the benefits, including the health insurance benefits, that come with a disability.

This leaves a population of workers who are under 65 and who are not disabled, yet who would prefer to retire before they are eligible for Medicare. This population is large and diverse, and many of its members presumably have good reasons for wanting to retire, including caring for loved ones and pursing life goals that can only be pursued outside of the paid workforce. But it is important to keep in mind that one of the goals of subsidizing medical insurance is to help keep people healthy, and there is some evidence to suggest that early retirement is not actually good for one’s health. Researchers at the Harvard School of Public Health have found that retirement are 40 percent more likely to have had a stroke or heart attack than older Americans who continue to work. This makes intuitive sense, as retirement by definition means a break with old routines and old relationships that might contribute to various aspects of well-being. And there is some evidence that social isolation raises the risk of early death. It is easy to see why Carney and the Obama administration have touted the benefits of early retirement. Doing so is politically popular. Yet one of the ironies of policy measures that make early retirement more likely is that they might actually make older Americans sicker, thus exacerbating health costs, not to mention the pain and suffering that is often a part of aging. Moreover, there is considerable evidence that there is a positive association between unemployment and mortality for the non-elderly as well.

So it could be that the best way for us to improve the health and well-being of Americans is to pursue policies that raise rather than lower labor force participation.

The health of the U.S. population is impacted by many other factors as well, including diet, stress levels, and the quality of our relationships. Since the mid-1990s, for example, we have learned a great deal about how adverse childhood experiences (e.g., “physical and sexual abuse, physical and emotional neglect, and various measures of household dysfunction, such as having divorced or separated parents or family members who were incarcerated or mentally ill or addicted”) impact physical health, findings that Paul Tough summarizes in How Children Succeed. Essentially, the more adverse childhood experiences you’ve had, the worse your outcomes on a wide range of measures, including addictive behavior and chronic disease. It seems reasonable to suggest that the decline of stable marriages among families with children in the last generation has meaningfully contributed to obesity, substance abuse, and other undesirable outcomes among today’s adults.


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