THE COST OF PROVIDING HEALTH-CARE BENEFITS TO EARLY RETIREES

Subsidized health care benefits would be guaranteed for early retirees ages fifty-five to sixty-four under President Bill Clinton's health c are reform proposal, This is an important policy issue because persons in this age group are the least likely age cohort of the nonelderly p opulation to be working. They are also the most likely to face high an d uncertain health care costs. Previous research has shown that access to continuation of health insurance coverage encourages retirement be fore age sixty-five. These retirement effects can add substantially to the federal government's cost of providing health care benefits to ea rly retirees. Based upon various assumptions for premium levels, the i nduced retirement effects of current workers, and the number of nonwor kers qualifying for subsidized benefits, we present total annual cost estimates to the federal government, based on 1994 figures, ranging fr om $9.1 billion to $19.6 billion, to provide subsidized benefits to th e nonworking population between the ages of fifty-five and sixty-four.