KHN Morning Briefing

Summaries of health policy coverage from major news organizations

White House Unveils Subsidies To Preserve Early-Retiree Coverage

A federal program that was authorized in the new health law will help companies pay for as much as $5 billion worth of medical bills of early retirees that they continue to insure, The New York Times reports. The program's purpose "is to reverse the erosion of employer-sponsored insurance." In 1988, 66 percent of large firms offered such coverage, while only 31 percent offered it in 2008, according to a senior White House official. The White House is hoping programs such as this one will rally more support for the health law, which continues to flag in polls (Pear, 5/4).

The Financial Times spells out some details: "Companies would be able to apply for the subsidies from June 1, which would cover early retirees older than 55 until they become eligible for Medicare at 65. ... The government will reimburse employers for up to 80 per cent of early retirees' medical expenses between $15,000 ... and $90,000. There is no limit on company size and both self-funded and insured plans can apply" (Fifield, 5/4).

Business Insurance: "To receive reimbursement, health care plans must have programs in place that save costs or have the potential to save costs for participants with chronic and high-cost conditions, according to a White House fact sheet" (Geisel, 5/4). 

Modern Healthcare: "Rising costs have made it hard for employers to provide quality, affordable health insurance for workers and retirees," HHS Secretary Kathleen Sebelius said. "The announcement continues what has been a rapid-fire implementation schedule for health insurance reforms dictated by the new reform law. Over the past several weeks, the HHS has called on insurers to adopt measures that allow young adults to stay on their parents' coverage for a longer period of time and policies to end most rescissions"(DoBias, 5/4). 

The Associated Press/Washington Post: "However, in the long run, experts predict that President Obama's health overhaul will accelerate the decline of employer-sponsored retiree coverage, by making it easier for people to find and keep affordable coverage on their own, as well as improving Medicare benefits." As of 2014, "the health-care law forbids insurers from denying coverage to people with medical problems, limits what the companies can charge older individuals, and sets up competitive health insurance markets where consumers can buy a policy, in many cases with direct government assistance. Early retirees will have options they don't currently enjoy" (5/4).

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