Wednesday, May 25, 2011

Health Care Security in Retirement: It's More than Medicare

Authored by Laura Howard, The Association of BellTel Retirees

A main issue facing retirees in America is the security of their health care.  And we're not talking about Medicare.  There are approximately 14.3 million retirees who earned health care benefits in retirement during their working years.  However, employer-sponsored retiree health care benefits are disappearing in the United States. 

According to the Kaiser Family Foundation's Employer Health Benefits 2010 Annual Survey, employer-provided health coverage for retirees has decreased significantly in the past two decades and continues to decline.  In 1988, 66 percent of companies with 200+ workers who offered health benefits to employees were offering similar benefits to retirees.  By 2008, only 31 percent of large firms offered coverage to retirees, and in 2010 the number dropped once again to 28 percent. 

Many retirees worked 20, 30 or more years for their employer, remained loyal to their companies and, in return, companies committed to providing health care coverage in retirement.  These benefits were considered deferred compensation and employees were asked to take lower pay, less vacation time, or other concessions for the assurance that their retirement health care would be secure.  Companies also benefited from the lower rates of pay through lower payroll taxes and lower pension obligations.  Over a career, these concessions add up to large investment by retirees in their own future health care and financial security which many employers have chosen to ignore.

For many retirees, this uncertainty comes at a time when costs continue to rise but pensions have not been increased, Social Security COLAs have stopped, and 401ks have diminished due to the economy. 

Unfortunately, when policy makers and even the general public think about seniors' health care, they only focus on Medicare.  While it is a large and important component, seniors know that their health care is more than just Medicare, and many have the out-of-pocket expenses to prove it.  Retirees are continually being asked to do more with less and asking them to pay for the health care benefits they earned during their working years is unfair and irresponsible. 

The issue of health care security is inextricably linked to one's financial security in retirement.  Seniors have many factors to consider when deciding whether or not to retire; the security of their health care benefits is a major consideration.  Preserving these earned benefits is critical to maintaining the independence and financial security of retirees while reducing the burden on Medicare and Medicaid.

The Association of BellTel Retirees believes that Congress must adopt policies and pass legislation that hold corporations accountable to their employees and retirees and does not allow them to breach a trust that was earned through years of hard work. 


David said...

As a retiree who has seen his healthcare go from $11 amonth in 2001 to almost $380 a month this year, I supprot the efforts of organisations like Protect and their efforts to protect earned healthcare for retirees.
It seems that during these tough times, only costs rise, not income.

Dave Simmonds
Staten Island Telco retirees.

Jack Brennan said...

I am a retiree of a major Communications Co. who
earned my health care by being paid at a wage lower
than comparable jobs in industry. Having worked in salary administration wages & benefits were considered part of total compensation. It is wrong of
corporations to eliminate this benefit. David is right that is the only one making the effort to protect our healthcare. They have a Bill HR1322 that needs to be enacted. said...

I am a Verizon retiree and totally support the Association in its effort to educate us on the reality of business ethics today which says, "if we don't have to do it by law then cut it out.

Unfortunately, I retired when the benefits practice contained the finger crossing words,
"we reserve the right to change amend or terminate this practice (retiree healthcare included)at any time in the future." I did not see those words in print before retirement; if I had, I may not have retired when I did.
J. Casey
Arlington, VA

C. William said...

Ms. Howard hits the nail on the head! Does anyone in Washington get it? The PPACA assumes that Medicare takes care of everyone 65 and over. Yes, Medicare is wonderful but employer-provided health benefits are a major part of healthcare coverage.

It was earned over an employee's working years and to have that coverage cancelled after a person retires is just plain robbery!