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Health Insurance and Retirement Decisions

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  • John Karl Scholz

    (University of Wisconsin-Madison)

  • Ananth Seshadri

    (University of Wisconsin-Madison)

Abstract

We develop a rich model to study the complex interrelationship between health insurance and retirement decisions. The decision to retire depends on a number of factors including availability of health insurance, health shocks, pensions, Social Security, and how consumption and health interact in the utility function. We incorporate these features in a computational model of optimal wealth and retirement decisions, solving the model household-by-household using data from the HRS. We use the model to study two important SSA priority areas: first, to what extent do people remain in the labor force until age 65 in order to maintain health insurance for themselves (and after age 65 to maintain health insurance for their spouses)? Second, do early retirees have poorer health than others and does the availability of Medicare interact with their decision to claim benefits?

Suggested Citation

  • John Karl Scholz & Ananth Seshadri, 2013. "Health Insurance and Retirement Decisions," Working Papers wp292, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp292
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    References listed on IDEAS

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    Cited by:

    1. Eric French & Hans-Martin von Gaudecker & John Bailey Jones, 2016. "The Effect of the Affordable Care Act on the Labor Supply, Savings, and Social Security of Older Americans," Working Papers wp354, University of Michigan, Michigan Retirement Research Center.
    2. Pelgrin, Florian & St-Amour, Pascal, 2016. "Life cycle responses to health insurance status," Journal of Health Economics, Elsevier, vol. 49(C), pages 76-96.
    3. Helen Levy & Thomas Buchmueller & Sayeh Nikpay, 2015. "The Effect of Health Reform on Retirement," Working Papers wp329, University of Michigan, Michigan Retirement Research Center.
    4. Helen Levy & Thomas Buchmueller & Sayeh Nikpay, 2018. "Is the Affordable Care Act Affecting Retirement Yet?," Working Papers wp393, University of Michigan, Michigan Retirement Research Center.

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