Retirees asked to fork over more
for their health benefits
Earlier this month, United Airlines said to help
it emerge from bankruptcy, the company needs retirees to pay a greater portion
of their medical benefits.
Other employers may not be facing Chapter 11, but
companies nationwide also are asking retirees to pay more for health
care, according to a new survey of some of the largest U.S.
employers.
The survey, released Jan. 14, was conducted by
the Kaiser Family Foundation and Hewitt Associates.
Ten percent said they eliminated subsidized
health benefits for future retirees in the past year, and 20 percent
said they are likely to end retiree health coverage for future
retirees in the next three years.
Employers also said they are increasing the share
retirees pay. More than 70 percent said they increased retirees'
contributions to premiums in the past year, and 86 percent plan to
increase retiree contributions within the next three years.
"Based on current trends, we can expect that
fewer retirees will have health coverage in the future, and those
who do will be paying more for their health care," Drew Altman,
president and CEO of the Kaiser Family Foundation, said in a press
release.
According to the study, employers are an
important source of health insurance coverage for people who retire
before they are eligible for Medicare, which is at age 65. Retirees
with Medicare rely on employer coverage to fill in Medicare's gaps.
Employer plans are typically the primary and only
source
of health insurance coverage for retirees under 65, and for those on
Medicare, they help pay for things, such as prescription drugs, that
the federal insurance program does not cover or cover completely.
"Prescription drug benefits offered by employers
to retirees tend to be much more generous than what seniors can
expect to get from Medicare if they sign up for the new drug benefit
when the new law goes into effect," said Tricia Neuman, a vice
president at Kaiser Family Foundation. "A big question is whether
the new Medicare drug law will encourage employers to stay in the
game."
The survey was conducted before final details of
the Medicare prescription drug legislation were decided, so the
survey did not ask employers to respond to specific provisions of
the bill. The new law offers incentives to encourage employers to
maintain health coverage for retirees eligible for Medicare,
including $89 billion in direct subsidies and tax benefits.