The Study of Health Insurance Costs and the Employment of Older Workers
Joanna Lahey

The Health Insurance Costs Study gathered information about state health care insurance mandates to explore whether employers are reluctant to hire (and whether they are inclined to fire or retire) older workers because they fear greater health insurance costs. An index was created to determine how much an average older worker in specific states cost compared to an average younger worker.

Key Research Questions:

How do health insurance costs affect the ability of older workers to find work?

How do state health insurance mandates affect the employment of older workers?

Study Status:

Data collection and analysis completed.

Selected Findings:

Health care costs keep workers in the labor force. In cities where health costs are high, older men are more likely to stay in the labor force than retire.

Employers treat all workers with higher health care costs similarly; they do not target older workers.

State-mandated employer coverage can drive up costs, particularly for younger workers, since four of the most expensive mandates (infertility services, mental health coverage, alcohol treatment, substance abuse treatment) generally affect younger wokers at higher rates than older workers.

Some states (e.g., Maine, Massachusetts, New Hampshire, New Jersey, New York, Vermont) have community rating, requiring the same insurance rates for everyone in a community, regardless of age, health status or prior claims. Community rating eliminates the difference in premiums due to age. In states where older workers cost relatively less, employment rates for older workers are higher than in other states.

Publications

The Issue Brief, "The Effect of Health Insurance Costs on the Employment Options for Older Workers" and the Summary Report of the Health Insurance Costs Study will be available in Winter 2007.