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Health Insurance Costs

This study examined one of the critical factors that could affect employment of older workers and workplace adoption of flexible work options — the costs of health insurance. Demographic groups that have higher health insurance costs, such as older workers, are less likely to be employed. In states where older workers' health insurance costs less, employment rates among those workers are correspondingly higher than in states where older workers’ health insurance costs more. Employers treat all demographic groups with higher health care costs similarly, indicating that many of the negative effects on older workers may be accounted for by financial concerns.

key research questions

  • What happens to health insurance costs as workers age?
  • What factors reduce the relative health care costs of older workers?
  • How do employees and employers respond to high insurance costs?

selected findings

  • In states with more mandates, the difference in healthcare costs between younger and older workers is smaller because the most expensive mandates (infertility, mental health, alcohol and substance abuse) are primarily utilized by younger workers.
  • In general, it does not appear that worker wages adjust (that is, drop) in response to higher health care costs.
  • Employment outcomes appear to decrease for workers with higher health care costs, and these results are stronger for men than for women.



For questions of information regarding the Health Insurance Costs and the Employment of Older Workers study, or to schedule a conversation with any of the Center’s team, please contact:

617-552-9195 |

the health insurance costs and the employment of older workers team

Joanna N. Lahey, PhD
Assistant Professor
The Bush School, Texas A&M University