Are You Relying On Employer Health Benefits?

Are You Relying On Employer Health Benefits? 

527283_1238349.jpgIn what AARP policy director John Rother calls “a race to the bottom,” hundreds of companies—ranging from the giants of American industry down to more modest enterprises—are asking their retired employees to choose between paying more of the soaring cost of health insurance, on the one hand, and accepting reduced levels of coverage on the other.

In a recent study, 71% of the companies surveyed by the Kaiser Family Foundation raised the premium on their retiree health plans. Many also chipped away at dental or eye coverage or increased the co-pay on prescription medication. In an environment where even Medicare premiums are rising to record levels for well-off retirees, these unexpected costs can have a substantial impact on the best-laid retirement plans.

On the bright side, many employers that currently offer a prescription drug benefit to retirees have no plan to terminate coverage in the immediate future. Since employer-sponsored drug coverage is often better than the plans offered through Medicare Part D, this can be good news—and some companies even allow retirees to supplement Part D with their own drug benefit.

Remember, according to most estimates, the typical couple aged 65 will rack up at least $200,000 in medical bills over the rest of their lives. If you’re concerned about any of these developments, please don’t hesitate to get in touch with us.

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