Thursday, September 02, 2010

Health care reform act does help early retirees, in two phases

The new health reform act contains a “bridge provision” whereby the Federal government can pay up to $5 billion in health care claims for early retirees from corporations, people from age 55-64 and too young for Medicare. The provision is supposed to help encourage companies to continue offering retiree health insurance until the federally subsidized health care exchanges, that would make retiree insurance more affordable, take over in 2014.

The news story appeared in the Washington Post on Sept. 1, by N.C. Aizeman, “2000 groups approved for early-retiree health-care funds, link here .

I had retiree health insurance with ING until I was 65. For about $160 a month I had coverage that would pay only 70% of inpatient hospital (although the rates would be discounted by United Health Care). Fortunately, I never needed to use it much (I had one MRI, which was covered at 50%, but discounted first by 75% by the UHC contract). The ability of large insurance carriers to arrange volume discounts with hospitals and providers is a big part of the picture.

Retiree health insuranc became a big issue in the 1980s as employers started offering "buyouts" to highly compensated employees in their 50s.  That's no longer sustainable.

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