The Affordable Care Act (or “Obamacare”) will undoubtedly affect all Americans as its provisions are rolled out for the next few years. One particular group that will see numerous impacts are Baby Boomers. Baby Boomers, who are the generation of Americans born between the years 1946 and 1964, are in the early stages of entering retirement.
For many Boomers, Obamacare may present an opportunity to retire earlier than they had previously planned. There are two key aspects of the new law that will help Boomers retire early. Those features are guaranteed coverage and subsidized premiums. In light of those features, many individuals who previously would have worked until reaching 65 (and obtaining Medicare coverage) may now be able to retire without having to go uninsured or obtain private health insurance. Additionally, the inclusion of individuals with pre-existing conditions creates an indirect subsidy funded through increased premiums paid by younger, healthier people.
Studies have predicted that between 500,000 and 1,000,000 Americans may choose to retire early now that they are no longer dependent on their employer for health insurance. Now that a public health insurance option is available even to those with pre-existing conditions, many individuals who keep working simply to stay insured will be able to immediately retire.
It’s too early to tell just how many Boomers will choose to retire early, but it seems likely that many workers will leave the workforce early as a result of the Affordable Care Act – just another unforeseen consequence of Obamacare.