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.