Retiree health coverage fading
By Larry Wheeler
Gannett News Service
WASHINGTON — More bad news for retiring workers.
Most large employers will require retirees to pay more to keep company-sponsored health insurance, and some future retirees may get none, according to a new survey of businesses.
For the next three years, 95 percent of large employers surveyed plan to continue offering health insurance to retirees now in company-sponsored plans.
But 22 percent of companies surveyed said they are likely to eliminate such coverage to future retirees.
"This study is the latest bad news for American workers on the healthcare front," said Drew Altman, president of the Kaiser Family Foundation, which conducted the survey along with Hewitt Associates. The Kaiser nonprofit health policy think tank is not affiliated with the Kaiser Permanente managed care network.
"Current retirees are being asked to pay more for their health coverage, and current workers are less likely to get health benefits from their employer when they retire," he said.
Workers who leave their jobs before reaching the Medicare eligibility age of 65 find access to their former company's health insurance program helpful because coverage on the private market is expensive and can be difficult. Once retirees are Medicare eligible, workplace insurance supplements the federal program and in many cases provides prescription drug coverage that Medicare does not.
The study is based on a survey of 435 private companies with 1,000 or more employees that now offer retiree health benefits. The firms employ 7.4 million workers and have 3.3 million retirees.
On average, newly retired workers who have not reached their 65th birthday pay $153 a month to continue health coverage through a former employer. Those who have turned 65 and entered Medicare pay $79 a month for insurance through their former employer.
More than eight in 10 surveyed employers said they are very or somewhat likely to continue increasing premiums for retirees and their dependents.
The average retiree health insurance contribution rose 19 percent for retirees younger than 65 and 20 percent for those 65 and older between 2001 and 2002, according to the survey.
