Employer-sponsored health benefits for retirees could go the way of house calls and dial phones thanks to increasing health care costs. A study by the Kaiser Family Foundation and Hewitt Associates says that 10 percent of 408 companies with 1,000 employees or more plan to drop coverage for future retirees. Twenty percent say they plan to do so in the next three years. The companies were polled between June and September 2003.
Employer-sponsored health insurance for retirees pays for benefits not covered by Medicare, such as prescription drugs.
“Prescription drug benefits offered by employers to retirees tend to be much more generous than what seniors can expect to get from Medicare if they sign up for the new drug benefit when the new law goes into effect,” says Tricia Neuman, ScD, a vice president at Kaiser Family Foundation.
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