Obamacare Leading to Later Retirement

A third of Americans expect they will have to delay retirement because the cost of healthcare is higher under the Affordable Care Act.

With the Affordable Care Act (ACA) officially underway, some less-than-ideal news has been revealed after the end of the first enrollment period. True, the Department of Health and Human Services announced it had surpassed the initial projection of 7 million for the year, but approval of the law is still low.

A new Associated Press-Gfk poll revealed Americans are at a standstill when it comes to how they view the ACA. Compared to March, 43% of Americans still oppose the law, although support is up slightly from 26% to 28%. An equal amount (28%) neither support nor oppose the ACA.

Given the glitches and difficulties during the first open enrollment period, it is unsurprising that 55% of respondents felt the operation of the health insurance exchanges went not too well or not well at all. Only 7% felt operations went extremely or very well.

A separate poll from MoneyRates.com, conducted by Op4G, found 33% of Americans believe the ACA will force them to delay their retirement. Just 17% said the law will allow them to retire earlier.

“A Congressional Budget Office report estimated that Obamacare would reduce US full-time employment by 2.5 million by 2024 because it would allow people to opt out of working,” Richard Barrington, CFA, senior financial analyst at MoneyRates, wrote. “Apparently, a significant portion of American workers feel it will do just the opposite by creating financial pressures that will force them to work longer.”

The 33% expecting to delay retirement cited higher healthcare costs under the ACA. Of those who feel they will have to retire later 39% projected it would be by 5 or more years. Another 30% expect to delay retirement by 3 to 5 years.

Of those who expect to retire sooner, 71% expect the date will move up by 3 years or less. Just 8% think the ACA will accelerate their retirement date by 5 years or more.

“While the poll shows that many Americans have formed an initial impression of how Obamacare will affect their retirement readiness, the true impact won't be known until the first wave of Americans crosses the boundary from the workplace to retirement under Obamacare,” Barrington wrote.