Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Despite the rise in dual-earner couples, many women still rely on their husband's as the primary source of health insurance coverage. While the source of health insurance coverage within a married household may matter little at younger ages, as couples approach retirement, it might become quite important. Husbands are three to four years older than their wives on average, meaning that the average man will reach Medicare eligibility at age 65, several years before his spouse. Therefore, a man who retires without a gap in his own coverage could still leave his wife uninsured, potentially for several years.

This paper considers the insurance coverage adjustments made by married couples around the time of the husband's retirement. A panel of 2,456 married couples from the Health and Retirement Study (HRS) is followed between 1992 and 2004, during which time more than half of the husbands retired. Multinomial logit models assess the differential health insurance trajectories for husbands and wives, the extent to which households avoid uninsurance, and the types of health insurance transitions made to maintain coverage. Particular attention is paid those covered by the husband's employer-sponsored health insurance prior to his retirement, as these households are most at risk for becoming uninsured.

Results indicate that becoming uninsured is no more likely at the time of retirement for either spouse than it is at surrounding times. About 60 percent of both men and women who had coverage from the husband prior to his retirement keep such coverage when he leaves his job, either in the form of retiree or continuation coverage. Differences by gender are evident among those who lose the husband's employer coverage at his retirement. Nearly half of men who lose their own employer-sponsored coverage obtain Medicare coverage and another one-quarter take up coverage from their wives. However, only one-quarter of women take up coverage from Medicare and one-third gain coverage from their own employer-sponsored plan.

One out of five women previously covered by their husband's insurance prior to his retirement switch to privately purchased non-group coverage after he retires, a rate that is twice as high at the time of the husband's retirement as otherwise. While privately purchased insurance allows the household to avoid some of the financial and health risks of lacking coverage altogether, it comes with high premiums and co-payments for those nearing retirement, and may not have generous coverage for the potentially costly health conditions that begin to occur around that age.

Additional analyses will consider the possible financial and health consequences of these transitions for married women who rely on their husband's coverage. Much literature has addressed uninsurance among the near-elderly, but this paper offers a new look at underinsurance in the years prior to Medicare enrollment. The financial costs of maintaining coverage for one's spouse after retirement will have important retirement planning implications, and will become increasingly important as offers of retiree coverage continue to decline and health care costs continue to rise.