OLDER WORKERS’ ACCESS TO EMPLOYER-SPONSORED RETIREE HEALTH INSURANCE, 2000-2004

Christine Eibner
ALICE M. ZAWACKI
ELAINE M. ZIMMERMAN

Abstract

Using a multivariate framework, we analyze recent trends in employer provision of retiree health insurance (RHI), eligibility for new retirees, and retiree contribution requirements. We also explore whether local labor market characteristics such as the unemployment rate influence RHI provision. Finally, we examine whether the Medicare Modernization Act (MMA) was associated with diverging trends in RHI access for Medicare-eligible and early retirees. Data come for the Medical Expenditure Panel Survey—Insurance Component (MEPS-IC). We find that, while RHI provision to existing retirees remained stable, eligibility for new retirees declined, and contribution requirements increased between 2000 and 2004. The local labor market had no effect on RHI provision. While early retiree coverage was more common than coverage for Medicare-eligible retirees, we did not find a divergence subsequent to MMA. These results suggest growing financial instability for retirees, both because RHI contribution requirements increased, and because businesses dropped coverage for new retirees.

The authors thank Carole Roan Gresenz and M. Susan Marquis for invaluable guidance in developing this project, and Randy Becker for numerous insightful comments on a preliminary draft. We also thank Arnold Reznek, Anurag Singal, and Ann Schatzer for support at the Census Bureau’s Research Data Center. This research was funded by the U.S. Department of Labor.