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Mari Edlin is a frequent contributor to Managed Healthcare Executive. She is based in Sonoma, California.
Retirees can expect to shoulder more than half of the cost burden of health benefits-51% to 54%-according to Towers Watson's 2010 Retiree Health Care Cost Survey.
NATIONAL REPORTS-As the cost of benefits increases, down go the employer-sponsored options for retirees. In fact, retirees can expect to shoulder more than half of the cost burden of health benefits-51% to 54%-according to Towers Watson's 2010 Retiree Health Care Cost Survey. In addition, just 45% can expect to receive an employer subsidy for medical coverage.
According to the Kaiser Family Foundation, only 31% of large private employers (companies with 200 or more workers) offer retiree health benefits to supplement Medicare for former employees 65 years and older. In the 1980s, two-thirds of all companies provided this benefit.
The 2010 Retiree Health Care Cost Survey also indicates that while opportunities to optimize retiree health benefits exist, most employers are not taking advantage. As many as 65% will not implement or consider moving from self-insured plans to fully insured; 67% have no intention of offering Medigap options; 70% will not convert a current subsidy to a retiree health account; and 91% will not implement a retirement medical savings account to accumulate unused healthcare dollars.
The Retiree Health Collaborative, launched in mid-2009, addresses that challenge by providing access to a wide range of coverage options, before and after Medicare eligibility; personalized concierge services to retirees; and the services of Towers Watson, a global professional services company, and of UnitedHealthcare, the largest provider of Medicare plans.
MEMBERS SELECT BENEFITS
A call center operated by UnitedHealthcare is at the core of the collaborative, counseling members about benefits based on their personal and financial needs. The advent of the Medicare Modernization Act of 2003 has provided more choices for individual Medicare beneficiaries, including private marketplace insurance purchasing arrangements, such as Medicare Advantage Plans and stand-alone Prescription Drug Plans, both of which UnitedHealthcare offers.
Employers uphold their financial commitments to retirees, while the collaborative relieves them of responsibility for selecting benefits afforded to these employees by Medicare, administering and managing them, communicating plan design and providing customer service. Employers can give retirees access to competitively priced, high-value medical plans, while keeping their own financial subsidies at sustainable levels, according to Osterndorf.
"The program gives retirees an opportunity to more effectively use their employers' committed resources, along with those available through Medicare, while also affording employees more control over their coverage," Osterndorf continues. "It provides a vehicle for working through choices. Going to the Medicare Web site is just too overwhelming."
As of early March, the Retiree Health Collaborative, targeting companies with 500 or more retirees, has seven member organizations, representing 25,000 lives. Osterndorf notes that neither employers nor retirees pay extra for the services provided by the collaborative.
The group is also developing online products for pre-Medicare retirees, which will be available next year.
"Employers don't seem to be managing chronic conditions for pre-Medicare retirees as well as they do for their active employees," Osterndorf says. "It's a win-win situation with cost savings."
As many as 70% of 50-to-64-year-olds report having been diagnosed with one or more chronic conditions, according to AARP.
Another survey conducted by Towers Watson in conjunction with the National Business Group on Health indicates that 46% of employers anticipate that reform will decrease employer-sponsored retiree medical benefits, while 35% say it will lead to fewer employers offering subsidized benefits.