Does Public Health Insurance Affect How Much People Work?

IB#17-12

The brief’s key findings are:

  • Workers with employer health insurance may be reluctant to leave their job, a situation known as “job lock.”
  • This study assesses whether public health insurance – specifically, the Medicare Part D drug benefit introduced in 2006 – allows people to leave a job.
  • The analysis focuses on a small segment of workers whose employers offer a retiree health plan, but only up to age 65. So, prior to Part D, retiring meant losing drug coverage at 65.
  • The results show that Part D did lead to a significant decline in full-time work for this group, with most switching to part-time jobs and a few retiring.
  • Not surprisingly, these effects were even stronger for less healthy workers, who were more dependent on the quality of their health insurance coverage.