Retiree Coverage

Presentation by

Lindsey Wyman

Supplemental Coverage

93% of seniors over 65 years old have some form of supplemental insurance in addition to Medicare

Employer-sponsored plans

Medigap

Medicare Advantage

Medicaid

Types of Supplemental Coverage

Percentages of Supplemental Coverage

Employer-sponsored Medigap Medicare HMO Medicaid Other None 0% 5% 1% 7% 10% 15% 20% 25% 30% 35% 40% 13% 13% 27% 39%

- Coverage for an active worker over 65 - Retiree coverage (similar to a benefit pension) - Medicare-eligible retirees

Employer sPonsored

Coordination of Benefits

Exclusion Method

Carve-out Method Coordination-ofBenefits Method

Unions and employer plans

Union members may have greater chance to receive more benefits because of the strength of the unions negotiating power Even though retiree benefits arent included as a mandatory bargaining subject in the National Labor Relations Act, they can serve to unify, maintain, and show the value of union membership

Challenges With Employer sPonsored Plans

- Employees who retire early have double the amount of premiums to pay as opposed to those who over 65 - Offer rates have risen, but eligibility and enrollment rates have gone down - Obamacare has forced 4.5 million workers to lose their employer-sponsored coverage because of the allowed exemptions

Medigap Coverage
- Cover some out-ofpocket expenses of Medicare - 10 Available Plan Combinations (Listed as Plans A J) - Manually underwritten and state-regulated - 1 in 5 Medicare beneficiaries rely on Medigap coverage
http://www.youtube.com/watch?v=QoF BShKG9fA

Pricing of Medigap Plans

Community (no-age) rated Issue (entry)age rated
Attainedage-rated
Same premium price for everyone Not based on age

Premiums are based on age at purchase Premiums are lower for people who buy at a younger age

The premium is based on your current age (the age you have attained) Premiums are low for younger buyers but go up as you get older.

Medicare advantage
- Health care plans approved by Medicare but offered through private insurance companies - Copays and deductibles usually lower than through normal Medicare - Monthly premium paid to Medicare - Must opt to receive Medicare Advantage Plan benefits, needs authorization - Many offered through Humana

Types of Medicare Advantage

-

Health Maintenance Organization (HMO) Preferred Provider Organization (PPO) Private Fee-for-Service (PFFS) Medical Savings Account (MSA) Special Needs Plan (SNP)

Choosing Medigap or Medicare Advantage Plans

Decide if you need supplemental coverage

Original Medicare

Medicare Advantage Plan = HMO, PPO, FFS. Etc.

Part A Hospital Insurance

Part B Medical Insurance

Combination: Part A, B, and some D

Part D Drug Insurance

Medicare Advantage

Additional Coverage = Medigap

MEdicaid
Gives coverage for those with low income, providing:
(1) Supplemental Security Income = full range of Medicaid benefits, pays Medicare Part B premiums and cost sharing (2) Coverage for Qualified Medicare beneficiaries, no Medicaid, but pays Medicare Part B premium and cost sharing (3) For Specified Low-income beneficiaries, pays Part B premium (4) Covered under optional state Medicaid program

Effects of Supplemental Coverage on Traditional Medicare

Demand for Medicare services is reliant on out-ofpocket expenditures

Whats Happening in the world of Retiree Coverage Today?

http://www.healthreform.gov/newsroom/early_reti ree_reinsurance_program.html

References
http://www.weeklystandard.com/blog s/obamacare-s-passage-millionshave-lost-employer-sponsoredhealth-insurance_607994.htm http://www.healthreform.gov/newsroo m/early_retiree_reinsurance_program. html http://www.medicare.gov/publications /pubs/pdf/02110.pdf