Perspective               

Survey Finds Retiree Benefits Declining

Almost 14 million of the 40 million people with Medicare rely on retiree benefits to help fill the gaps in Medicare. But a joint survey by the Kaiser Family Foundation, Commonwealth Fund, and Health Research and Educational Trust shows that retiree health benefits are declining.

For example, the survey found that the percentage of firms with 200 or more workers offering retiree health benefits fell to 34 percent from 41 percent between 1999 and 2001, reaching the lowest rate in five years. In addition, retirees with health benefits tend to pay a higher share of health insurance premiums than active workers (26 percent of the total premium for Medicare-age retirees compared with 13 percent for active workers). And while nearly all people with Medicare who get retiree health benefits have prescription drug coverage, 51 percent of firms said they are very or somewhat likely to increase retiree cost-sharing for prescription drugs through higher copayments or coinsurance and 32 percent plan to introduce new cost-sharing formulas that will require retirees to pay more for non-generic drugs.

If you are a person with Medicare who is retired, but do not have access to 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.

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