Mega Corp Retiree Healthcare Cost Increase

[eytonxav]

Just saw my price tag for my 2014 retiree medical and dental coverage (pre-medicare for DW and me) which is subsidized by my former mega corp at 64% and it increased 21% vs 2013. I can only imagine the cost driver behind this increase. I go on medicare in June of next year, so not sure how that might affect costs, as mega corp provides a medicare supplement and drug coverage, while DW will remain pre-medicare for another 5 years.

 

[Katsmeow]

We get subsidized health insurance through DH's retiree plan (company absorbs only 5% of any increase). DH went on Medicare last year. The increase was 2012 to 2013 was over 100% (2013 was the first year it was just me and the kids on the policy - Megacorp pays for DH's prescription drug plan). For 2013 to 2014 the increase is about 60%. I would be thrilled with a 21% increase.

As for the cost drive behind the increase, I assume you are talking about the fact that most retired people under 65 who aren't on Medicare are likely to be 55 or above. I would guess that the class of people between 55 to 64 would have much higher claims than younger people so claims experience would be the driver of the cost increases. With retiree insurance the group is usually that of retirees and not the employee group which is why retiree insurance tends to go up at such a high rate. You don't have the younger people with fewer claims to offset the older people with more claims.

 

[bbbamI]

I was amazed our retiree health insurance did not go up one penny for 2014. ..and we have the same coverage/deductible/out of pocket.

 

[savory]

My megacorp ins. went up about 10% this year. I was OK with that. One reason for my satisfaction is after my company was acquired, they continued to honor my retirement program and the premium cost came down nearly 40%. So, my costs are still a couple hundred dollars cheaper per month for the premium. Compared to ACA, my policy is much cheaper.

 

[golfnut]

Just got our retiree (pre-medicare) 2014 rates in. Premium will be $800 to cover wife, son and myself. Only a $5.00 increase from 2013.

 

[JoeWras]

The good news? Our retiree medical (pre-medicare) went up only 2%.

The bad news? No subsidy from Megacorp. The pool is based on actual costs.

My retiree+spouse costs for 2014 (if I were retired, I'm still w*rking, but paying attention) will be:

$14000 Premiums (about $1200 per month)
$ 7500 Out of pocket max

Total $21.5k out of pocket budget number. If not sick, probably more like $16k or so.

I'm also watching ACA because I think this benefit may go away before I retire. ACA won't be much better. I like Megacorp's insurance. It is very good. Not sure I want to switch, but might have to.

 

[Jack_Pine]

Ours went up 31% and 21% of that increase is being passed to the employees. We have no retiree benefits.

Our increase is due to claim history for the prior year.

I am still amazed those corps incur that expense of retiree care.

 

[eytonxav]

We get subsidized health insurance through DH's retiree plan (company absorbs only 5% of any increase). DH went on Medicare last year. The increase was 2012 to 2013 was over 100% (2013 was the first year it was just me and the kids on the policy - Megacorp pays for DH's prescription drug plan). For 2013 to 2014 the increase is about 60%. I would be thrilled with a 21% increase.

As for the cost drive behind the increase, I assume you are talking about the fact that most retired people under 65 who aren't on Medicare are likely to be 55 or above. I would guess that the class of people between 55 to 64 would have much higher claims than younger people so claims experience would be the driver of the cost increases. With retiree insurance the group is usually that of retirees and not the employee group which is why retiree insurance tends to go up at such a high rate. You don't have the younger people with fewer claims to offset the older people with more claims.

Actually, even though this is a corp plan, I was thinking there is an element of Obamacare in the increase in addition to the claims aspect which you correctly noted. It also gauls me, that my fellow retirees in other states (like NY, Florida) pay less than we do in Texas year after year under identical subsidies/plans. My cost for medical and dental for me and DW for 2014 is $7883 which I suppose is not that bad for very robust coverage, but I'd love to pay what golfnut is paying provided the coverage is decent. Nevertheless, I suppose it won't be long and the mega corps will drop all retiree coverages.

 

[golfnut]

DFW,

The $800 figure in my post is per month. On top of that we are paying $157 per month for dental. $11,484 per year.

 

[eytonxav]

DFW,

The $800 figure in my post is per month. On top of that we are paying $157 per month for dental. $11,484 per year.

Thanks for clarifying, we can only wish it was per year

 

[Brdofpray]

My retirement health costs increased by 6% this year. I am paying $745/m for just myself. This is a top of the line plan, with low out-of-pocket, and deductibles. From what I can determine, it equates to a platinum plan, or better, in the ACA. I know this sounds like alot for a single, however, with the DW costs covered 100% by her retirement package, our medical insurance budget is just me. In my warped sense of rationalizing things, thats an out of budget expense of $745 for the two of us. We are okay with this.

I have thought about seeing if I can do better. However, I will most likely see how things shake out this year. I am reluctant to expose myself to God, and Country through a less than secure website, we have all been hearing about lately.

 

[meierlde]

My retirement health costs increased by 6% this year. I am paying $745/m for just myself. This is a top of the line plan, with low out-of-pocket, and deductibles. From what I can determine, it equates to a platinum plan, or better, in the ACA. I know this sounds like alot for a single, however, with the DW costs covered 100% by her retirement package, our medical insurance budget is just me. In my warped sense of rationalizing things, thats an out of budget expense of $745 for the two of us. We are okay with this.

I have thought about seeing if I can do better. However, I will most likely see how things shake out this year. I am reluctant to expose myself to God, and Country through a less than secure website, we have all been hearing about lately.

Just to get an cost fix go to the ehealthinsurance.com web site and you can get quotes on non subsidy insurance without registering. You can then at least see how this compares with a local platinimum plan. (If you dont qualify for a subsidy there is no need to go thru the government web site, you can even go directly to the insurance providers web site. The only folks who have to go thru the exchanges are those who want the subsidy.

 

[Katsmeow]

Actually, even though this is a corp plan, I was thinking there is an element of Obamacare in the increase in addition to the claims aspect which you correctly noted.

I don't really think so, at least for DH's Megacorp. The plan always covered most of what ACA required. The main ACA changes were adding kids up to 26 to the plan and removing the lifetime limit. Those changes were made a few years ago and so aren't the source of the high increases the last couple of years.

 

[SteveNU]

Our 2014 subsidized retiree plan premiums are going up about 10% from this year. Premiums for health and dental are $1000 a month for me, my wife and two kids. The OOP maximum is $5000 which we will hit pretty quick, so looking at $17k for next year. If we weren't covering the two kids who are 21 and 24 the premiums would drop by about $300 a month.

 

[Chuckanut]

WOW, I wish I got that subsidy for my medical insurance. Enjoy it.

 

[Brett_Cameron]

Ours went up about 7%, the first increase since 2011 at least.

 

[travelover]

My ex-employer provided high deductible policy (for me only) went up from $60 to $70 a month.

 

[mf15]

Ouch: Retired in 08 at 60 but my medium/small corp let me stay on the health plan until
I hit 65 which was this July, $98/month,wife was already on medicare. So for me going
on medicare is doubling my cost. When I go into work on Monday will find out what kind
of increase everyone is hit with this year.
Yes I work 4 days a month, as independent contractor,at former company, they had a
oh crap moment,when they figured out they got rid of too many of us old farts that
knew what we were doing.
Old Mike

 

[eytonxav]

I don't really think so, at least for DH's Megacorp. The plan always covered most of what ACA required. The main ACA changes were adding kids up to 26 to the plan and removing the lifetime limit. Those changes were made a few years ago and so aren't the source of the high increases the last couple of years.

As to the covering dependents up to 26 under their parents plan per Obamacare, the law provides companies with a carveout for that benefit for retiree coverage as it only applies to active employee coverage, unless the company chooses to do it anyway out of the goodness of their hearts. Nevertheless, my megacorp would cover retiree dependents that were still in school up to age 26, but since my DW graduated, she fell off my plan.

I still believe part of the increase is being driven by Obamacare, although it would be difficult to prove unless you were in HR Benefits,

 

[MichaelB]

A couple of charts from KFF tracking health care premiums since 1999. The reasons for the increases may differ over the years but costs have been increasing sharply and steadily for over a decade. (presentation here)
.
.

 

[Gotadimple]

In general, retiree health care premiums may go up based on the experience of the group. So, if in one company, they spent an average amount for claims, the premium should stay roughly the same. If the claims expense was high, the insurer would require a higher premium.

It is important to remember that most mega-corp insurance is self-insured. That means the employer sets up a fund administered by the carrier. They negotiate the administration fee and the claims expense is added to that. Some plans look at the experience (claims expenses) prospectively - they forecast - and some look retrospectively - based on history.

Bottom-line, the experience of the group will drive the premiums. Obamacare requirements were priced in over the last two years.

 

[kz]

We actually saw a decrease in our health ins. costs this year. First time in 7 yrs. And our co-pays for drugs also decreased.

 

[MBAustin]

We haven't received our 2014 info yet, but last year's increase was more than 15% so I'm expecting more of the same this year. Our retiree policies are employee only (no spouse or dependents options). Fortunately, we w*rked for the same megacorp so have the same insurance. DH was older when he ER'd so his is more subsidized than mine. I'm paying about $350/month and his is less, so I'm not complaining.

 

[KM]

Just got our retiree medical and dental costs for 2014 (we have subsidized retiree benefits from my company).

Our medical stayed the same and our dental went down slightly. Yup - I was shocked and very happy. Don't think that ever happened when I was working.....

 

[Katsmeow]

As to the covering dependents up to 26 under their parents plan per Obamacare, the law provides companies with a carveout for that benefit for retiree coverage as it only applies to active employee coverage, unless the company chooses to do it anyway out of the goodness of their hearts. Nevertheless, my megacorp would cover retiree dependents that were still in school up to age 26, but since my DW graduated, she fell off my plan.

I am aware that there is no requirement on retiree plans. Nonetheless, DH's megacorp elected to cover all children up to age 26 regardless of school status.