Health Insurance and Retirement Decisions

John Karl Scholz and Ananth Seshadri
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John Karl Scholz: University of Wisconsin-Madison
Ananth Seshadri: University of Wisconsin-Madison

Working Papers from University of Michigan, Michigan Retirement Research Center

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?

Pages: 64 pages
Date: 2013-09
New Economics Papers: this item is included in nep-age, nep-dge, nep-hea, nep-ias, nep-lab and nep-upt
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Citations: View citations in EconPapers (4)

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