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More Retiree Health Plans Move Away From Traditional Medicare

New York City and other employers are shifting retirees out of traditional Medicare into Medicare Advantage plans. This shift has financial and health implications for retirees, and raises questions about the ability of employers to change benefits in the future.

  • New York City is negotiating to shift 250,000 retirees out of traditional fee-for-service Medicare into a privately operated Medicare Advantage plan.
  • Half of large employers offering benefits to Medicare-age retirees have contracts with Medicare Advantage plans, nearly double the share in 2017.
  • Payments by the federal government to Advantage plans average 102 percent of its spending on the fee-for-service traditional program.
  • Retirees who are shifted into Medicare Advantage plans may not fully understand the major differences from traditional Medicare.
  • IBM retirees were given the option to stick with the old benefit — but they would lose access to balances in their health reimbursement arrangements.
More Retiree Health Plans Move Away From Traditional Medicare
Retirees whose former employers offer health coverage are being shifted to privately run Medicare Advantage, often against their wishes. The change saves millions for employers.