Does public health insurance affect how much people work?

Abstract

The brief's key findings are: (1) Workers with employer health insurance may be reluctant to leave their job, a situation known as "job lock." (2) This study assesses whether public health insurance – specifically, the Medicare Part D drug benefit introduced in 2006 – allows people to leave a job. (3) The analysis focuses on a small segment of workers who have a retiree health plan only up to age 65. So, prior to Part D, retiring meant losing drug coverage at 65. (4) 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. (5) Not surprisingly, these effects were even stronger for less healthy workers, who were more dependent on the quality of their health insurance coverage.