Tue, Mar 04, 2014 - Page 4 News List

Early retirement raises healthcare costs: research

By Alison Hsiao  /  Staff reporter

Early retirees have higher healthcare expenditure than those who retire after 60, a study by the Chang Jung Christian University has shown.

A research team led by Wender Lin (林文德), an associate professor of healthcare administration, found that Taiwanese who retire before hitting 60 had higher healthcare costs than those who stop working past that age, with the overall medical outlay difference between the two groups estimated at between NT$771 million and NT$.769 billion (US$25.4 million and US$157.3 million).

The team derived their results by studying the healthcare expenditures of people who retired at between 50 and 59 years old over the three years prior to and six years after their retirement, and comparing these figures with those of non-retirees in the same age bracket.

The researchers found that those who were between 50 and 59 when they ceased working used outpatient services more often in the six years after their retirement than their working counterparts, resulting in a difference of between NT$968 and NT$2,676 per person in annual outpatient services expenses between the two groups.

The difference suggests that early retirement leads to an increase of health expenditure in outpatient services of between NT$657 million and NT$2.217 billion in total for that group, Lin said.

According to the study, the discrepancy in overall healthcare expenditure — the sum of outpatient and inpatient services costs — between early and later retirees is estimated to be nearly NT$4.8 billion at the most.

However, Lin said that the study’s results require further clarification, as additional research would be required to determine if the upsurge in medical expenses was an outcome of early retirees’ health deteriorating after they leave the workforce, or a result of their using healthcare services more often due to a lowered cost of time and desire to accrue “health capital.”

Health capital is defined as a person’s potential to be healthy in the course of their lifetime.

The medical expenses of people who retire in their 60s showed no significant difference when compared with those of working sexagenarians, the study showed.

Between 2001 and 2009, 40 percent of employees retired before the age of 60, while more than 60 percent of civil servants stopped working at that age between 2002 and 2010, data show.

Those figures put the national average retirement age at between 54 and 56, a relatively young age compared with the average for Organisation For Economic Co-operation and Development countries, most of which had national averages above 60, the team said.

The team said the nation’s comparatively young retiring age, coupled with factors such as an aging population and a low birthrate, could result in labor shortages, and create financial difficulties for the retirement pension and the National Health Insurance programs.

Given this, “the impact of the retirement age on the financial viability of the National Health Insurance system should be taken into account in future policy debate,” the researchers said.

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