COVID-19’s Impact on Older Workers: Employment, Income, and Medicare Spending

Oct 13, 2020 / Amanda Chase, Horsesmouth Assistant Editor

From the earliest days of the pandemic, COVID-19’s disproportionate impact on the health of people age 65 and older—in rates of infection, hospitalization, and death—has been painfully apparent. Yet the pandemic’s impact on the financial well-being of older people—in terms of employment, income, and health insurance coverage—has received little, if any, attention. To fill that gap, this issue brief describes the demographics of older workers and assesses their pandemic-related loss of employment, income, and employer-sponsored health insurance coverage. It also considers the potential effect of these losses on federal spending for Medicare.

In 2018, prior to the pandemic, more than one in six Medicare beneficiaries, or 10.1 million people, were employed, including 9.0 million beneficiaries age 65 and older and 1.1 million under age 65. During the pandemic, about 11 percent of people 65 and older, or about 1.1 million people, have lost their jobs. These job losses could result in many older workers shifting from employer-sponsored health insurance to Medicare, increasing federal spending for Medicare.

The job losses and income reductions among Medicare beneficiaries also could threaten their financial security, resulting in more beneficiaries qualifying for Part D low-income subsidies, Medicare Savings Programs, or even Medicaid. During this time, Medicare will serve as an important safety net, but policies to encourage the continued employment of older workers could have long-term effects on Medicare spending and people’s financial security for the remainder of their years.

Compared with younger adults, older workers face greater health risks from COVID-19, especially if they are unable to work remotely. Jobs that allow older workers to work from home will prevent them from having to choose between their health and their income. With regard to health insurance coverage, many working older Americans could lose their employer-sponsored coverage if they lose their jobs, requiring them to receive full benefits from Medicare. This shift should further motivate policymakers to address limitations to Medicare’s benefits, which already burden beneficiaries with low and modest incomes.

You can find the full Commonwealth Fund study here.


This material is provided exclusively for use by individuals with an active license to the Savvy Social Security Planning Program. Use of this material is subject to the Social Security Planning Program Agreement and applicable copyright laws. Unauthorized use, reproduction or distribution of this material is a violation of federal law and punishable by civil and criminal penalty. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness is not guaranteed and all warranties express or implied are hereby excluded.

© 2020 Horsesmouth, LLC. All Rights Reserved.