Large Employers To Raise Health Insurance Premiums, Copays for Retirees, Kaiser Family Foundation Study Finds
In an attempt to head off rising health costs, more than 80% of employers plan to raise premiums or copayments for current retirees in the next three years, and almost one in four employers plan to cut such benefits for future retirees, according to a new study by the Kaiser Family Foundation, the AP/Washington Post reports. For the study, researchers from KFF and the consulting firm Hewitt Associates surveyed 435 businesses with more than 1,000 employees in an online poll between July 2, 2002, and Sept. 9, 2002 (Carter, AP/Washington Post, 12/5). The surveyed companies, which provide health coverage to a total of 5.4 million retirees, spent $12.5 billion on health benefits for retirees in 2001, and that cost is expected to increase 16%, to $14.5 billion, this year (Kemper, Los Angeles Times, 12/6). According to the survey, 95% of large employers said they plan to continue to offer benefits to current retirees over the next three years; 82% said they plan to increase premiums, and 85% plan to increase prescription drug copayments for those beneficiaries. In addition, 22% of employers said they plan to eliminate benefits for future retirees within the next three years (Vandewater, St. Louis Post-Dispatch, 12/5). Among the survey's other findings:
- 13% of large employers said they had eliminated benefits for future retirees in the previous two years.
- 78% of employers said they are "likely" to continue offering a prescription drug benefit, even if Congress passes a Medicare drug benefit.
- Between 2001 and 2002, retiree contributions on average rose 19% for retirees younger than age 65 and 20% for retirees older than over age 65 (Kaiser Family Foundation release, 12/5).
The Los Angeles Times reports that the survey results "foreshado[w] troubling ripple effects and even tougher policy decisions ahead" for lawmakers struggling to address the increasing number of uninsured residents. If fewer employers provide health coverage, Medicare's financial problems will only worsen, according to the Times. The results also indicate possible "financial difficulties" for future retirees (Los Angeles Times, 12/6). "Working men and women cannot count on retiring with the same employer health benefits offered to many in their parents' generation. And finding comparable insurance on their own won't be easy," KFF Medicare Policy Project Vice President Tricia Neuman said (AP/Washington Post, 12/6). The study is available online. ABCNews' "World News Tonight" yesterday reported on the study (Judd, "World News Tonight," ABCNews, 12/5). The full segment is available in RealPlayer Video online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.