Megacorp Reneges on Retiree Health Care

[youbet]

. Turns out more Americans seek healthcare outside our borders because it’s too expensive in the US, than foreigners coming in to the US for various reasons.

That makes complete sense. Some routine procedures are available less expensively to Americans if they go offshore for them. Cheaper = demand by the masses. Cutting edge advanced treatments are more available in the USA but are expensive. Expensive = demand by wealthy foreigners or charity cases.

 

[pb4uski]

^^^ exactly what I was thinking... Americans go abroad for more routine services due to higher cost here... and foreigners come here due to quality and cutting edge treatments.

I still think that the US isn't ready to nationalize its health care system a la the UK or Canada... though I concede that our system is broke and needs major changes.

It seems to me that there is a lot room between where we are and nationalized health care. Perhaps nationalize the financing with some sort of single payer-type system but leave health care delivery in the private sector... sort of a medicare for all but with reimbursement rates that medical service providers can make a reasonable profit on (IMO Medicare imbursement rates are generally too low and adversely impacts pricing for other patients).

 

[brett]

We were somewhat surprised when we stayed at a B&B in San Jose, Costa Rica for a few nights. It turned out that usually all three of their suites were rented to Americans who came to a nearby hospital for medical procedures/ operations.

 

[Winemaker]

That makes complete sense. Some routine procedures are available less expensively to Americans if they go offshore for them. Cheaper = demand by the masses. Cutting edge advanced treatments are more available in the USA but are expensive. Expensive = demand by wealthy foreigners or charity cases.

Before Megacorp sold my division off in 2013, in 2014, they were offering a health care plan option, where I could elect to have any required/scheduled surgeries abroad. They would pay for my travel to the medical destination with a family member, put us up for duration in hotel/hospital, and travel back. There was also a cash award also, up to 50% of the savings would be rebated back to family. Never found out if the plan was successful, I was gone.

 

[Midpack]

That makes complete sense. Some routine procedures are available less expensively to Americans if they go offshore for them. Cheaper = demand by the masses. Cutting edge advanced treatments are more available in the USA but are expensive. Expensive = demand by wealthy foreigners or charity cases.

That would be my guess too.

 

[Koolau]

Megacorp's employee/retiree handbook ALWAYS said that they reserved the right to change OR do away with retiree health care. Fortunately, they have only dramatically changed the plan over the years - 3 times since I ERd 13 years ago. Now, they put XX dollars in an HSA and then have VIA help find the best area plans for MC supplement and/or Part d, etc.

It seems to work pretty well for us. I didn't quite know what to expect as i approached MC age (65). When it all happened, the big (good) surprise was that OOP went down a LOT. Now, there are situations where that might not be the case. Still, as Megacorp was changing our retiree HC system (for the worse) in years past, I was paying OOP about $10K/year, most years. Now, with MC and the HSA, its almost a wash most years.

My point, Megacorp did not renege on their promises, but they made me pay a LOT more of my HC until MC kicked in. As always, YMMV.

 

[mamadogmamacat]

Interesting, my OOP is about the same at 9.8k in 2017 and expect about 5 to 12% more in 2018, most of the increase being in premiums for mega corp retiree health care. And I chose the relatively high deductible option, or the cost would have been about 3.5K more per year. grateful to be relatively healthy too, so mostly just paying premiums. Hope medicare is in good enough shape when I get there in 7 yrs that I can say the same as you.

 

[scrabbler1]

My former company made a lot of changes to its retiree benefits at the end of 2001, when I was still working there.


In meetings held throughout the company late in the afternoon on Friday, November 30th, they announced a phasing out of their pension program and retiree medical benefits. With the pension, they froze it at the of 2001 unless the employee met a combination of service length and age; those lucky employees would be grandfathered into the existing pension program. Everyone else would be forwarded into a new Cash Balance program which is a hybrid of a DB and DC program but not as good a deal for those of us (like me) who were pretty far along the way in the pension program but not enough to get grandfathered into it.


On the health benefits side, they would end the program for new retirees starting in 2002 and freeze their contribution into the program for existing retirees. This is where the real trouble started. We had many employees who were considering retirement soon and they now wanted to get their papers in in time, just over a month from the meeting's date of 11/30/2001. But the company required that retirees had to give one month's notice to HR in order to retire by a given date. And by the time the meeting ended and everyone got back to their desks, it was after 4 PM and HR had basically packed it in and gone home, leaving those would-be retirees SOL.


But those would-be retirees didn't accept this underhanded tactic without a fight. They threatened legal action (or went through with it, I'm not sure) and were allowed to officially retire before 1/1/2002 with their retiree medical benefits intact.


I still have my 2001 frozen pension intact, and I see the same amount in a pension statement I get every year. The Cash Balance statement shows a slightly increasing amount every year due to an interest credit. The pay credits stopped 10 years ago, of course, but they were never very much because I had started working part-time in 2002.


The company ended its Cash Balance program around 2005 to new hires and replaced it with a profit sharing program.

 

[fasteddie911]

Interesting thread. One thing I wonder about is cause and effect. When people say the US healthcare system doesn’t have good outcomes, longevity is one of the key metrics I’ve seen used to substantiate “poor outcomes.” The US has very high rates of obesity and obesity-related illnesses and deaths. But is that because of the healthcare system?

I think it’s more related to US culture vs foreign cultures with regard to physical fitness, portion sizes and fast food. In the US, kids and adults ride in cars, while in many countries people walk and/or bike as a part of daily life. Very few Americans commute to work on a bike, but lots of people in Amsterdam do, as one example. Anyone who’s traveled abroad knows the portion sizes in the US are HUGE. When we were in Greece for 6 weeks, we saw almost no fast food chains. If the countries with socialized medicine had the same cultural factors as the US - ie drive everywhere vs walk or bike and eat huge portions of unhealthy fast food - would their care really deliver better results? And is the reason these other countries don’t behave like the US driven by their preventative healthcare systems? Maybe partly, but it seems to me it’s more culturally driven.

While it may be true that more Americans go elsewhere for medical procedures than foreigners come here, I think it’s also true that Americans go abroad to try to save money, not get better quality. People who can afford it come to the US from other countries, not to save money but to get the best possible quality of care on demand, with no wait. To me, there is a big difference in the motivation.

Good points made. I agree that life expectancy can be skewed by things like obesity, but also genetics can play a role, auto death, gun/suicide deaths, etc. Much of which doesn't actually reflect healthcare quality. Moreover, if looking at healthcare outcomes, I wouldn't be surprised if it's not remotely close to an apples-to-apples comparison between countries. Every country likely codifies and classifies data differently, reports it differently, some more completely than others, maybe certain laws or customs skew comparisons. Heck, even within the US outcomes between hospitals can look totally different depending on how the hospital codes and "games" the system. IMO, you can get top notch healthcare in the US, if you have the means and resources to seek it out.

 

[GravitySucks]

Actually, even if it's considered a contract, in writing and in the employee handbook, they can still unilaterally change it. That's why I never figured out unions. Not sure what you get for your money, but they sure don't protect jobs and pensions.

If I had not taken promotions out of the union I was in I would have not had my pension discontinued and would have 100% of HI covered. When I left the union management pension was better and HI similar. By the time I retired it was not the case.

 

[brett]

In our jurisdiction benefits are exactly that. There is zero contractual commitment unless of course they are written into an employment contract or part of a DB plan. Over the years I have, at various times with various employers had benefits increased and at times decreased. Though more of the latter than the former. Car plans, coffee, vacation days, DC matching rates, dental, ....you name it.

My understanding was always that it was open season on any benefit that was not included in a DB plan or an employment contract. Most prudent employers will have words to the effect in their HR documentation. The DB plan could be amended at any time, subject to legislation, however the value of the DB and/or contractual DB benefits to the employee could not be retroactively reduced, ie they were protected.

As a senior manager I was often called upon to explain to employees or employee groups that these non contractual benefits are not entitlements and that they can be changed or rescinded at any time. No different than the benefit of proving free coffee or tea for employees.

 

[CaptTom]

As a senior manager I was often called upon to explain to employees or employee groups that these non contractual benefits are not entitlements and that they can be changed or rescinded at any time. No different than the benefit of proving free coffee or tea for employees.

I hope you had the decency to be honest with them.

Our senior management would hide behind euphemisms, claim they've "improved" the benefits while actually reducing them, and use industry averages as excuses. They'd claim these cuts were necessary to survive, then tell stockholders that the company is making money hand over fist, all the while feathering their own nests with huge raises and bonuses.

Or more often, they'd just hide behind HR, and let THEM lie to us.

 

[Sunset]

.....
I still think that the US isn't ready to nationalize its health care system a la the UK or Canada... though I concede that our system is broke and needs major changes.

It seems to me that there is a lot room between where we are and nationalized health care. Perhaps nationalize the financing with some sort of single payer-type system but leave health care delivery in the private sector... sort of a medicare for all but with reimbursement rates that medical service providers can make a reasonable profit on (IMO Medicare imbursement rates are generally too low and adversely impacts pricing for other patients).

We already have a Nationalized system, it's called Medicare and Medicaid.
There is nothing wrong with doing that, after all we feel very comfortable with a Socialized Armed forces (and many other services), instead of allowing companies to maintain their own set of armies like warlords do.

While medical staff deserve to make a "fair" wage, like firefighters or police currently do, I don't see any need for us (the taxpayers) to fund a profit for the companies.
We don't fund a profit for Police or Firefighters.

 

[pb4uski]

We already have a Nationalized system, it's called Medicare and Medicaid.
There is nothing wrong with doing that, after all we feel very comfortable with a Socialized Armed forces (and many other services), instead of allowing companies to maintain their own set of armies like warlords do.

While medical staff deserve to make a "fair" wage, like firefighters or police currently do, I don't see any need for us (the taxpayers) to fund a profit for the companies.
We don't fund a profit for Police or Firefighters.

Medicare and Medicaid are nationalized funding, but they both still use privately owned medical service providers.

The VA might be a better example because the VA controls the medical service providers... but perhaps not a great one given the scandals that they have had in recent years.

The profit motivation is IMO a significant factor in why the US is on the leading edge of medical technology.... what innovations have these countries with nationalized health care discovered? Few in comparison to the US.

There are some things where nationalization makes sense... defense, law enforcement, fire protection, etc.... the key question is where to draw the line.

 

[CaptTom]

I still think that the US isn't ready to nationalize its health care system a la the UK or Canada... though I concede that our system is broke and needs major changes.

It seems to me that there is a lot room between where we are and nationalized health care. Perhaps nationalize the financing with some sort of single payer-type system but leave health care delivery in the private sector... sort of a medicare for all but with reimbursement rates that medical service providers can make a reasonable profit on (IMO Medicare imbursement rates are generally too low and adversely impacts pricing for other patients).

That's sort of what the ACA was supposed to do. It was actually developed by the Heritage Institute (a right-leaning think tank) as an alternative to a single-payer system. The idea was to leverage the efficiencies of the market.

It's too bad it got so politicized. We may have been able to do something like that if it hadn't been turned into a political football.

We already have a Nationalized system, it's called Medicare and Medicaid.
There is nothing wrong with doing that, after all we feel very comfortable with a Socialized Armed forces (and many other services), instead of allowing companies to maintain their own set of armies like warlords do.

While medical staff deserve to make a "fair" wage, like firefighters or police currently do, I don't see any need for us (the taxpayers) to fund a profit for the companies.
We don't fund a profit for Police or Firefighters.

I think the big problem we face is that there is so much money being siphoned out of our health care system, that those who benefit from it have the political clout to kill any real attempt to remove those profits from the system.

 

[scrabbler1]

CaptTom, two really good points you just made in post #115.

 

[poppydog]

UK poster here, and I feel for my US friends here who have to worry about healthcare like this in their later years. What I find despicable is that mega corps can change the rules in this way any time they like. We’ve also had changes in pension entitlements etc. as the costs have escalated over the years, but existing benefits are protected. Something as paramount as medical benefits in the U.S. should not be allowed to be taken away by companies as they please. It seems to me to be a human rights violation.

 

[stepford]

It seems to me to be a human rights violation.

One man's human rights violation is another man's free market capitalism. As we are all keenly aware this is not our parents' version of retirement security.

 

[Rianne]

One man's human rights violation is another man's free market capitalism. As we are all keenly aware this is not our parents' version of retirement security.

So where's the free market? Can't choose our doctors or treatment or know what the price is for treatment. I thought free market meant competition where one product is better than another because of quality and price and as a consumer, we get to choose. This is more like a dictatorship where the insurance companies dictate our medical care.

 

[brett]

I really have no issue with corporations changing the nature of their benefits. I have worked for companies where benefits were actually increased. In one case because the cost of the benefits decreased and the company decided to keep the benefit expenditure the same and use the money to enhance benefits.

I have also worked at a company that came very close to shutting it's doors. We were bought out. Benefits were reduced. And reduced again a few years later-including the elimination of my own first rate supplemental benefit coverage in retirement. I did not like it but it was the employers prerogative to do so.

Employer benefits are not an entitlement unless written into an employment agreement of some sort.

I believe that the root cause is tying heath care insurance to the workplace/employer. It can place an unfair burden on both employers and employees. It has always seemed a little silly to me that this is the way in which it is done.

 

[Cut-Throat]

That's sort of what the ACA was supposed to do. It was actually developed by the Heritage Institute (a right-leaning think tank) as an alternative to a single-payer system. The idea was to leverage the efficiencies of the market.

Correct! -- This was proposed by the GOP as an alternative to 'Hillary Care' when Bill was POTUS..... It was the only legislation that could be passed, so the left 'held it's nose' and passed it.... It was better than nothing, but certainly not a solution. It was a first step....... We're still waiting, and it ain't getting better.