Health Insurance Patterns Nearing Retirement

Gaps in health insurance coverage among the near-elderly are of particular policy concern both because older individuals are more likely to have health shocks and also because they are more likely to have a retirement nest egg to protect. This working paper compares health insurance coverage of the Baby Boomers with coverage for two earlier cohorts using data from the Current Population and the Health and Retirement Survey (HRS). I also analyze the experiences of the original HRS respondents as they age into Medicare coverage. My main finding is that while exposure to risk is relatively high, the realization of risk is unlikely, and not that much wealth is at stake. Almost one-quarter of the original HRS cohort was uninsured at some point in the six-year window before Medicare eligibility, but only two percent had an uninsured hospitalization and the amount at stake for the median uninsured person is relatively low: between $10,000 and $20,000 in total net non-housing, non-pension wealth. Lack of assets may be a larger problem for these households than lack of health insurance coverage, and policies aimed at preventing poverty may be more important for their well-being than policies to expand insurance coverage