Age-specific Retirement Effects of The ACA Exchanges

In the U.S., as workers near traditional retirement age, health insurance becomes a
major consideration in retirement decisions, especially for those who are too young to
qualify for Medicare. In this paper, I examine the extent to which the opening of the
Affordable Care Act (ACA) exchanges affected the retirement expectations and decisions
of older workers. I estimate a difference-in-differences model that exploits variation in
workers’ access to employer-based retiree health insurance (RHI) prior to the passage
of the Affordable Care Act. Retirement expectations and behavior are compared before
and after the 2014 opening of the ACA health insurance exchanges. I find significant
effects on both expectations and behavior for those nearing the minimum Social Security
Eligibility age of 62, but not for earlier or later ages. The expected probability of working
full-time at age 62 declines 5.4 percentages points for those without RHI relative to those
with RHI. Treated individuals were 49 percentage points more likely to be retired by age
61 or 62 following the opening of the exchanges, relative to those in the comparison
group.