Monday, May 16, 2016

Fading Fast: Fewer Seniors Have Retiree Health Insurance

May 05, 2016 

| Tricia Neuman and Anthony Damico

Employer- and union-sponsored retiree health benefits have served as an important source of supplemental coverage for people on Medicare.  Retiree health plans help fill the gaps in Medicare’s benefit design, often cover some or all of Medicare’s cost-sharing requirements and deductibles, and include a cap on out-of-pocket spending – a benefit that is required to be provided by all Medicare Advantage plans, but not covered under traditional Medicare, and of great value to retirees needing costly medical care.  For retirees, employer-sponsored supplemental coverage limits the costs they would otherwise incur for their medical care.

The Kaiser Family Foundation has been tracking trends in employer-sponsored health coverage, and has documented a significant drop in the share of large employers (200+ workers) offering retiree health coverage, from 66 percent in 1988 to 23 percent in 2015.  Firms that continue to offer retiree health benefits have adopted various strategies to limit their liability for these costs, including: hard caps on their financial liability, a shift from a defined benefit to a defined contribution approach, and increases in premiums and cost-sharing requirements paid by retirees and  their spouses.  In recent years, some employers have elected to offer retiree benefits through contracts with Medicare Advantage plans and private health insurance exchanges.

http://kff.org/medicare/issue-brief/fading-fast-fewer-seniors-have-retiree-health-insurance/

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