New Report Examines Shift to Medicare Advantage by Large Employers that Offer Retiree Health Benefit

[Yo_Mama_Been_Loggin]

A new Kaiser Family Foundation (KFF) analysis examines the extent to which large employers that offer retiree health benefits are turning to Medicare Advantage (MA), the reasons why they are making this shift, and the implications for retirees and federal spending.

Among the key findings:

Currently, only 13% of large employers (200 or more workers) offer retiree health benefits. In 2022, half (50%) contracted with MA plans to provide that coverage—nearly double the share (26%) who did so in 2017.

About 44% offered retirees no choice but to receive their health benefits through MA. As a result, those retirees are unable to choose Original Medicare (OM), unless they are willing to give up their retiree health benefits.

A driving reason employers cited for offering retiree health benefits through MA contracts was to lower their own financial liability. For some, the adoption of MA “appears to be a strategy to maintain benefits for their retirees, without terminating coverage or adopting other changes that more directly shift costs onto retirees.”

https://www.medicarerights.org/medicare-watch/2022/12/08/new-report-examines-shift-to-medicare-advantage-by-large-employers-that-offer-retiree-health-benefits

Glad I'm not one of those.

[ProfessorGAC]

1. The Math Makes Sense To Me

Not that I approve of this, but when we looked at our choices, MA was always cheaper, no matter the company.
So, these employers save money by not paying for supplemental plans.
Like I said, I get the finances, but these seems like small change.
If they absolutely must save those pennies, they could offer the cost of an MA plan as a monthlypayment, then the retiree would only have to pay the delta.
But, that would be too much work I suppose. Or so they'd claim.

[walkingman]

2. My previous employer is one that went to MA after my retirement. It is a PPO and I can

go to anyone that accepts Medicare. However, because you are not guaranteed underwriting if you try and go back to a Supplement I was concerned if they dropped healthcare for retirees in the future.

So I called Medicare and was told that if the employer were to drop the offered plan then I would be offered guaranteed underwriting - like you are when you first enroll at age 65?

Not sure if that id the truth or not - but I hope so?

[Deuxcents]

4. Hmmm.. after this year, my employer is only offering Advantage Plans

I’m retired n do not want to change from Original/Actual Medicare. I have 2023 to do my research and I’m real sure Congress won’t be of any help now that the R’s have the House. I’m not happy about this as I’ve heard n read that once your in their Advantage Plan, it’s difficult if not impossible to get out. I wonder why these private insurers were able to offer their Medicare plans.. this is not Medicare for all.

[MichMan]

6. Wht not just decline your employer insurance completely then ?

[Demsrule86]

22. They pay for it or part of it...you want to turn down money?

[walkingman]

27. That is my case also - a good plan at basically no cost and a very low out-of-pocket

but several years after retiring I was diagnosed with cancer and became worried about what would happen it my employer no longer offered retiree healthcare. That is what made me pursue "what-if".

[MichMan]

39. Is the employer also covering the part B premium?

I just signed up for a MA plan and still have to pay my Medicare part B premium.

[walkingman]

29. To simply answer your question - because it is cheaper to the company.

Many people don't realize-

"The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.

As a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve."

[Raven123]

5. Been through a similar issue with a parent

Plan was eliminated by employer and indeed, no underwriting was required when applying for a new plan.

[Ms. Toad]

18. I don't know about that particular circumstance -

but a lot of life changes (moving out of the geographic region of your MA plan; the plan no longer being offered) give you the opportunity for a second chance to enroll in original medicare (Parts A & B + a Medigap plan).

I know it is true for employee insurance - my spouse stayed on my work plan and when I retired she was able to enroll in original Medicare with guaranteed issue in a Medigap plan.

[sinkingfeeling]

3. IBM just did this. And they cut the retiree 'benefit' from $3,000 to $1,300 a year.

[BlueWaveNeverEnd]

28. my former employer just did a bait and switch on retirees...they are pissed, filing lawsuit

[honest.abe]

7. Perhaps I am clueless but why are employers involved in a retirees choice to use MA or OM?

If the person is retired there is no "employer"... right??

[LiberalFighter]

8. Medicare only covers 80% of the covered costs.

The other 20% is covered either by you or your employer's plan.

[honest.abe]

9. If you are retired there is no employer.

I am confused.

[LiberalFighter]

10. That is why I stated you or your employer's plan.

Some retiree's receive medical coverage from their past employer.

[honest.abe]

11. I didnt realize that was an option.

Is there some advantage to that rather than just handling the decision and choices yourself?

[LiberalFighter]

19. I'm not sure of your question.

[honest.abe]

20. I think I get it now. Edhopper below explained it.

[edhopper]

12. Some rmployers

promise to keep covering employees after retirement. They pick up the cost Medicare doesn't.

[honest.abe]

13. Yeah, I get it now. I just didnt realize that was an option.

I dont think I want to do that. I would rather have the control to make my own choices.

[edhopper]

14. Well

Medicare Advantage cost $$, so they are paying for it, rather than the $200 a month or more out of your pocket.

[honest.abe]

15. So its like a benefit to previous employees.

I guess that make sense then. Still not sure I want them involved in my retirement decisions.

[edhopper]

16. You would still have Medicare

up to you if you want the extra coverage. Unless your retirement decision is to spend more money on healthcare.
I believe (and I might be wrong) that if you go to a doctor that only takes Medicare and not this Advantage plan, then normal Medicare rates apply.

[honest.abe]

17. I think I am going to get "gap coverage" from a insurance company.

I think that pays anything beyond what Medicare doesnt pay. I am still investigating all this so not entirely sure. Its all very confusing.

[Ms. Toad]

21. That's close to correct.

Unless you are ~70, you will have to pay the annual deductible (~$200/year). But you can get a Medigap plan for ~$100/month (in Ohio) that covers everything else. There are cheaper plans available if you are OK with copays to for doctor's visits (for example). The lettered plans are fixed regardless of carrier, so shop for the cheapest.

If you are unsure at the time you have to make your decision - go for a Medigap plan. You generally have a once-in-a-lifetime chance to enroll in a Medigap plan when they are forced to issue you a plan and can't charge you more based on your health condition. You can always change to a MA plan later (you get an opportunity every year). The same is not true for Medigap plans - if you skip this opportunity, chances are you will never get another opportunity.

[honest.abe]

23. Im not going to fully retire until Im 70 so I still have few years to sort this out.

Thanks for this information.

[Ms. Toad]

30. You'll still have to pay the deductible,

since you aren't 70 yet. The change too, place sometime between when my spouse turned 65 and I did. She was eligible for the full coverage plans (i.e. no deductible) and I was not. The loss of that plan is no big deal - the added premium (calculated over a year) was more than the deductible - so it would have been throwing money at the insurance company for her to buy the no-deductible plan.

If you haven't talked to your state's SHIIP folks, they are an excellent source of information.

[honest.abe]

31. Im still on my employers medical plan so I dont need to do anything at the moment...

except enroll in Part A. I will sort this out this out later.

Thanks for the info.

[Ms. Toad]

35. Yup - my spouse was the same.

Although - had I done my research in advance, we might have enrolled her in Medicare earlier. We're paying less with Medicare + a Medigap plan than we were on my employer's plan. It's worth checking out since you're working past 65.

[honest.abe]

36. Interesting. Yes, I will check into it.

Thanks.

[Deuxcents]

25. It IS confusing n imo, they like it that way

Free this..free that w/ insurance Medicare. Nothing is free. As I understand it, the payout to the insurance company comes on the back end when the patient is billed. I do get retirement health benefits from my ex employer..they are bargained for thru my union. I will have to give up a couple of perks if I cannot enroll in Original Medicare n my supplemental. If you’re thinking of Advantage, check w/ your health providers to make sure it will be accepted.

[honest.abe]

32. Yep.. seems to be intentionally confusing.

And even more so as we age and are not as alert as we once were. Its really sucks that there is so much pressure on us to figure this out.

[edhopper]

38. There is a nonprofit group

Medicare Rights. Org. They will talk to you and explain it all. Good group, helped me figure out what I needed, and didn't need.

[LiberalFighter]

26. They are only involved if it was part of your retirement plan.

I have three options: Regular Medicare, BCBS Medicare Advantage, or Aetna Medicare Advantage. If I enroll in Regular Medicare I pay an additional $17 a month for former employer part. The 20% part. Otherwise, I don't have additional monthly premiums for the MA plans.

I also have dental, hearing, and vision in my plan and recently Over the Counter benefits. And there are additional benefits in our plans.

In 2007 my former employer paid into a VEBA and no longer has control of the plan.

If you don't have retirement plan from your former employer as part of your health care you are responsible for the 20% not covered by Regular Medicare. Either out of your pocket directly or enrolled in a supplemental plan.

[honest.abe]

33. I actually dont know if my current employer provides retirement insurance plans.

I suspect not. I will figure it out once I get closer to when I actually retire in a couple of years.

[BumRushDaShow]

37. Just to add to what others mentioned

The federal government, as part of their benefits package for fed employees, offer retirees (and survivors of federal employees) the option to maintain their health plans in the FEHB (Federal Employees Health Benefits) program, where the government will continue to subsidize part of the monthly premiums the same as if you were a current employee, and the retiree/survivor can select which plans they might want each open season.

When it comes time for Medicare application once eligible, the retiree/survivor can then sign up for Medicare (and pay those premiums), which will automatically become the "primary" payee (paying ~80%) AND they can still keep their FEHB plan (and continue to pay those premiums), which will pretty much pick up the rest of the cost (~20%) of the medical charges (like a medi-gap type plan).

[Demsrule86]

24. They offer paid retirement insurance...which is a good thing.

[honest.abe]

34. Yeah I get it now.

But I dont think my employer offers that.