Health Affairs

Posting date: January 14, 2004

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Health Affairs, 10.1377/hlthaff.w4.7
Copyright © 2004 by Project HOPE

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Large Firms’ Retiree Health Benefits Before Medicare Reform: 2003 Survey Results

Frank B. McArdle ¹, Patricia Neuman ^2*, Michelle Kitchman ³, Kerry Kirland ⁴, Dale Yamamoto ⁵

¹ Frank McArdle is manager of the Washington, D.C., research office of Hewitt Associates.
² Patricia Neuman is vice president and director, Medicare Policy Project, at the Henry J. Kaiser Family Foundation in Washington, D.C.
³ Michelle Kitchman is a senior policy analyst at the Kaiser Family Foundation.
⁴ Kerry Kirland is a research consultant for Hewitt Associates in Lincolnshire, Illinois.
⁵ Dale Yamamoto is chief health care actuary for Hewitt Associates in Lincolnshire, Illinois.

^*Corresponding author.

Abstract

This survey of large, private-sector employers offering retiree health benefits in 2003 provides a detailed baseline of private retiree health plans on the eve of the most sweeping changes to Medicare since its enactment. Total retiree health costs rose 13.7 percent in 2003, and average retiree contributions to premiums for employees age sixty-five and older retiring in 2003 rose 18 percent. Nearly half of surveyed employers have capped their contributions to health coverage for retirees over age sixty-five. Before passage of the new Medicare legislation, 20 percent said that they are likely to eliminate benefits for future retirees within three years.

Key Words: Access To Care, Business Of Health, Consumer Issues, Health Reform, Medicare, State/Local Issues, Health Spending

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