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Retirement Lock and Prescription Drug Insurance: Evidence from Medicare Part D

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  • Gal Wettstein

Abstract

I examine whether lack of an individual market for prescription drug insurance causes individuals to delay retirement. Exploiting the 2006 introduction of Medicare Part D, which subsidized drug insurance for Americans over age 65, I use a triple-differences design that compares labor outcomes of individuals with retiree health insurance up to age 65 to those with insurance for life, before and after age 65, before and after 2006. I find that those with benefits only to age 65 decreased full-time work by 8.4 percentage points, of which 70 percent was due to transitions to part-time work.

Suggested Citation

  • Gal Wettstein, 2020. "Retirement Lock and Prescription Drug Insurance: Evidence from Medicare Part D," American Economic Journal: Economic Policy, American Economic Association, vol. 12(1), pages 389-417, February.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:1:p:389-417
    DOI: 10.1257/pol.20160560
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    Citations

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    Cited by:

    1. Sezen O. Onal, 2023. "Does the ACA Medicaid Expansion Encourage Labor Market Exits of Older Workers?," Journal of Labor Research, Springer, vol. 44(1), pages 56-93, June.
    2. Sanzenbacher, Geoffrey T. & Wettstein, Gal, 2020. "Drug insurance and the strategic behavior of drug manufacturers: Evergreening and generic entry after Medicare Part D," Journal of Health Economics, Elsevier, vol. 72(C).
    3. Farbmacher, Helmut & Tauchmann, Harald, 2021. "Linear fixed-effects estimation with non-repeated outcomes," FAU Discussion Papers in Economics 03/2021, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics, revised 2021.
    4. Daniel Kaliski, 2023. "Identifying the impact of health insurance on subgroups with changing rates of diagnosis," Health Economics, John Wiley & Sons, Ltd., vol. 32(9), pages 2098-2112, September.
    5. Quinby, Laura D. & Wettstein, Gal, 2021. "Do deferred benefit cuts for current employees increase separation?," Labour Economics, Elsevier, vol. 73(C).
    6. Hampton, Matt & Totty, Evan, 2023. "Minimum wages, retirement timing, and labor supply," Journal of Public Economics, Elsevier, vol. 224(C).

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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