General Motors (Stock Quote: GM) is slashing health care benefits for 100,000 white-collared retirees at the end of the year to cut costs.
As more retirees and employees at mid-sized and small companies begin to worry about cutbacks on healthcare, MainStreet spoke with Steve Zaleznick president of Longevity Alliance and former AARP executive, about options for individuals that lose health insurance.
What is happening across the nation to health care benefits?
There’s a lot of elimination of retiree health benefits. There is a lot of restructuring of ways that employers have been paying for health care benefits for retirees.
How is it possible to change health care benefits?
Generally when this is written into a contract there’s what is described as "reservation and rights," that it’s the current intent of employers [to provide benefits], but it’s not a right.
If health care is cut, what steps should retirees take to continue benefits?
It’s a very individual kind of situation but they should seek to make sure everything is set with Medicare or individuals over 65. For ways of supplementing coverage, they should either research a variety of plans or talk to knowledgeable provider.
Correct. What ends up happening is that you would want to decide if you want to go the route of Medicare Advantage plan, it’s the Medicare program as administered by private plans and with it comes networks, or traditional Medicare, which is more of a fee-for service plan. You should also consider purchasing a supplement plan or a Medicare Part D Plan, which is Medicare benefit program. Medicare Advantage will cover drug benefits.
What price difference can you expect to pay in coverage?
It’s very specific to the individual. Research by Fidelity, indicates that someone turning 65 can expect to pay around $190,000 [upon] their retirement. For a range, it’s probably half of that and that’s a fairly wide range.