Wednesday, July 16, 2008

GM apparently will ship retirees to Medicare: is this a real hardship?


Recently the major media companies have reported that General Motors is ending health care coverage for previously salaried (exempt, not hourly) retirees. Some reports say that the measure applies only to those over 65. Apparently, many retirees had advantage programs that replaced Medicare (and conventional supplements) with coverage that may have been much better. Now, older retirees say that they are faced with finding adequate insurance, and some fear that they could be excluded for pre-existing conditions. It would appear that these concerns apply largely to Medicare Part B Supplement, to pay the 20% not covered by Medicare (after deductible), as well as some copays for Part A hospitalization (and some limits on Part A).

What I have found, as I have covered in the blogs before, as that if one applies for AARP plans right when turning 65, very adequate supplemental plans seem to be available at reasonable cost. A similar comment appears to apply to Part D prescription drugs. So far, it appears that AARP has been able to get better rates (especially with United Health Care) than have many employers (even with Blue plans). Some employers have admitted this openly (even to me). I don’t know why this is the case, other than those who join at 65 may be healthier than older persons who suddenly must shop around.

Apparently GM’s plans had been very generous, and retirees fear that they will not be able to find physicians or specialists who take Medicare. My own personal experience so far in northern Virginia seems to be that it is not difficult to find physicians, but many physicians who do seem to be from overseas (including India, Pakistan and the Middle East). The same comment applies, however, to some employers’ pre-65 retiree plans (apparently GM’s was better).

The central reference on the web seems to be “Extend Health,” here. A search will find a large number of recent media stories on the matter in most newspapers, broadcast networks and wire services.

GM actually owned information technology giant Electronic Data Systems (“EDS”), founded by Ross Perot, from 1984-1996. How times have changed.

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