Don't let lawmakers throw us under bus!
Those in our community still among the fortunate 18.5 million American retirees receiving employer-provided health care coverage are split into two groups. About 14.3 million are Medicare eligible, receiving employer-provided health care as supplemental insurance. According to the Congressional Budget Office this includes 9.5 million people receiving employer-provided drug coverage thus obviating the need for Medicare Part D, which in most instances would be more costly. The other 4.2 million are too young for Medicare and have employer-sponsored health care as primary coverage. Many of us worked for years, taking a lower rate of pay, with the promise that the company would provide our pension and cover our health insurance in the years to come, but that promise is in danger of being broken due to changes in the health care laws. While I support the idea that we should provide the ability for all U.S. citizens to have some type of health care, I strongly believe that those of us who were promised if we worked for one company for 30 plus-years, and met our part of our obligation, should not be forced into private health care policies due to changes in the deduction allowed by the federal government.
In 2004 when the Medicare Modernization Act (creating Medicare Part D) was first passed, there was a fear that employers who were providing retiree drug coverage would use the law as an excuse to drop their Medicare eligible retirees, forcing the government to take over. So a very lucrative deal was offered to employers. For every $100 the company spends on retiree drug benefits, Medicare sends it a subsidy payment of $28. On top of that, the companies got a rare double tax break. The $28 subsidy is tax-free, and the company was allowed to deduct the entire $100 as a business expense. The new 2010 version of health care reform law has left the 28 percent subsidy intact and continued to exempt it from taxation. But companies will no longer be allowed to also deduct the subsidy from their tax return, as if it were an expenditure of their own. This has caused major corporations to weigh the cost of their plans against the $2,000 per employee/retiree penalty which would be imposed by the new federal health care law should they drop the health plan coverage altogether.
According a 2009 Kaiser Family Foundation study, the average costs for an employer-provided health plan approaches $5,000 for an individual and over $13,000 for a family. If you were an employer, could you imagine a better boost to your bottom line than to get out of the insurance business? If you were an employer wouldn't you gladly accept the penalty if it would save millions of dollars? Wouldn't it be irresponsible to your stockholders to do otherwise?
We all need to ask member of Congress why they allowed retirees to be thrown under the proverbial bus by providing such an employer inducement to drop coverage and how they plan on fixing the mess they created for us.
Byron Atkinson
Lake Zurich