Perspective
New Surveys Show Retiree Health Coverage Still Eroding
A study funded by the Centers for Medicare and Medicaid Services (CMS) and published recently in the journal Health Affairs found that between 1988 and 2001, larger companies were the most likely to drop health insurance coverage for their retirees. From 1991 to 2001, the percentage of companies with more than 200 employees that offered retiree coverage fell from 47 percent to 34 percent. In addition, 9 percent of the companies surveyed said they were very or somewhat likely to eliminate those benefits over the next two years.
Future retirees may be hardest hit. In a survey conducted by the Kaiser Family Foundation and Hewitt Associates, 80 percent of companies with 1,000 or more employees plan to raise premiums and copays over the next three years. About one in five employers said they are likely to drop health coverage for new retirees in that same period, and 85 percent said they are likely to raise prescription drug copays or coinsurance.
This decline in the availability of retiree insurance will leave more and more people to rely solely on Medicare for health coverage, although Medicare covers less than half of a typical person's health care costs. If you are a person with Medicare who is retired, but do not have retiree insurance, there are other sources of supplemental coverage that can help fill the gaps in Medicare such as private supplemental insurance, a Medicare HMO, or Medicaid and other government programs for people with low incomes. If you cannot afford your retiree insurance anymore, you should think hard before dropping it if it gives you good prescription drug coverage because you cannot buy good prescription drug coverage on your own. Call your State Health Insurance Assistance Program (SHIP) for more information on your supplemental insurance options. The number is available at the Medicare hotline at 1-800-MEDICARE or go to http://hiicap.state.ny.us/home/link08.htm#telephone.