External Factors, Including Reform Initiatives, Cloud the Retiree Medical Picture
Driven by a prolonged economic recession and already high health care benefit costs for active employees, large U.S. employers are continuing to shift significant health coverage costs to retirees or exiting sponsored retiree health benefit programs altogether, according to Towers Perrin's 2010 Retiree Health Care Cost Survey.
The survey finds that pre-65 retirees, who are not yet eligible for Medicare, will be hardest hit as they attempt to balance fixed incomes with steady increases in health coverage costs. At the same time, the survey also reveals that many employers are missing significant opportunities to deliver retiree benefit value while saving money and improving program effectiveness.
According to Towers Perrin, surveyed employers' total health benefit costs for retirees will increase 6% for pre-65 retirees and 4% for post-65 retirees in 2010. While these rate increases are consistent with past experience, the impact on retirees is significant. Today, only 45% of survey respondents subsidize retiree health care coverage in some form. That figure reflects a steady decline over the past 20 years. In addition, many employers have put caps on their premium subsidies and, since plan costs are now well in excess of those caps, many retirees now bear the full brunt of cost inflation.
"Virtually all retirees have been anxiously watching their investments over the last year and a half. For retirees supported by investment returns or living on fixed incomes, 2009 was a time filled with deep concerns," said Dave Guilmette, Managing Director of the Towers Perrin Health and Welfare practice. "In addition to their income concerns, many retirees face a special financial challenge: purchasing health care coverage. As employers pull away from subsidization of retiree health benefits, retirees — especially those who are not yet eligible for Medicare — are facing a significant financial burden."
Among surveyed employers, the total annual cost for pre-65 retiree health coverage has increased 6%, to $7,596 for a single retiree in 2010, compared to $5,184 for a single active employee. The 2010 cost for family coverage (for the increasing group of retirees that still have dependent children) is $19,596 — nearly 31% more than comparable costs for family coverage for active employees.
In plans that offer an employer subsidy (many do not), the subsidy covers less than half of the total cost, on average, and typically does not increase to keep up with inflation. The annual cost share pre-65 retirees pay to cover themselves is $3,984. Their share to cover themselves plus one dependent is $7,668, and $10,548 for themselves plus family. These costs are roughly three times higher than the cost share their active employee counterparts pay for similar coverage. In addition to higher premium costs, pre-65 retirees are paying more toward their ongoing health care expenses due to cutbacks in benefit designs.
For post-65 retirees, the cost of individual plans will increase an average of 4%, to $3,840, while the cost of plans covering a retiree plus one dependent will increase to $7,848. While the relatively low increase is good news, it masks the fact that a number of employers have eliminated prescription drug coverage or substantially reduced benefits to keep cost increases in check. With employer subsidies once again significantly lower than those for active employees, retirees pay over half of the annual premium cost — resulting in contributions that are, on average, double what these retirees would pay as active employees
Excerpts taken from the Towers Perrin 2010 Retiree Health Care Cost Survey
2010 HSA Contribution Limits, Deductibles, an Out-of-Pocket Expenses
2010 offers individuals and families additional opportunities to save for current and future health care with a health savings account:
- HSA holders can choose to save up to $3,050 for an individual and $6,150 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,050 for an individual and $7,150 for a family) – and these contributions are 100% tax deductible from gross income.
- Minimum annual deductibles are $1,200 for self-only coverage or $2,400 for family coverage.
- Annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) cannot exceed $5,950 for self-only coverage and $11,900 for family coverage.
|
|
Minimum
Deductible
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Maximum
Out-of-Pocket
|
|
Contribution Limit
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55+ Contribution
|
|
Single
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$1,200
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$5,950
|
|
$3,050
|
$1,000
|
|
Family
|
$2,400
|
$11,900
|
|
$6,150
|
$1,000
|
For more detailed information on HSAs and taxes, visit the U.S. Department of Treasury Web site at www.ustreas.gov or talk with your tax advisor.
MEDICAL NEWS 
Excerpts taken from WebMD.
This newsletter is not intended to give medical advice. If you are experiencing physical symptoms, you need to consult with a physician.
25 Ways to Find Joy and Balance During the Holidays
Feeling down during the holidays can be tough, especially since you seem so out of step with the world. Everyone else seems to be beaming, ruddy-cheeked, bursting with holiday spirit. You’re feeling wretched and exhausted.
But here’s something to cheer you up the next time you’re stuck in a room of revelers at a holiday party: Plenty of them are probably unhappy, too.
“I think a lot of people would say that the holidays are the worst time of the year,” says Ken Duckworth, MD, medical director of the National Alliance on Mental Illness. “They’re just straight up miserable, and that’s not only for people with clinical depression.”
So if the family gatherings, the endless parties, and the shopping get you down, you’re hardly alone. But people with depression -- or who have had depression in the past -- need to be especially careful when coping with holiday stress. While it might take some conscious effort on your part, you can reduce stress -- and maybe even find some holiday joy, too. Here are some tips.
1. Keep your expectations modest. Don’t get hung up on what the holidays are supposed to be like and how you’re supposed to feel. If you’re comparing your holidays to some abstract greeting card ideal, they’ll always come up short. So don’t worry about holiday spirit and take the holidays as they come.
2. Do something different. This year, does the prospect of the usual routine fill you with holiday dread rather than holiday joy? If so, don’t surrender to it. Try something different. Have Thanksgiving at a restaurant. Spend Christmas day at the movie theater. Get your family to agree to skip gifts and instead donate the money to a charity.
3. Lean on your support system. If you’ve been depressed, you need a network of close friends and family to turn to when things get tough, says David Shern, PhD, president and CEO of Mental Health America in Alexandria, Va. So during the holidays, take time to get together with your support team regularly -- or at least keep in touch by phone to keep yourself centered.
4. Don’t assume the worst. “I think some people go into the holidays with expectations so low that it makes them more depressed,” says Duckworth. So don’t start the holiday season anticipating disaster. If you try to take the holidays as they come and limit your expectations -- both good and bad -- you may enjoy them more.
5. Forget the unimportant stuff. Don’t run yourself ragged just to live up to holiday tradition. So what if you don’t get the lights on the roof this year? So what if you don’t get the special Christmas mugs from the crawl space? Give yourself a break. Worrying about such trivial stuff will not add to your holiday spirit.
6. Volunteer. Sure, you may feel stressed out and booked up already. But consider taking time to help people who have less than you. Try volunteering at a soup kitchen or working for a toy drive. “You could really find some comfort from it,” says Duckworth, “knowing that you’re making a small dent in the lives of people who have so little.”
7. Head off problems. Think about what people or situations trigger your holiday stress and figure out ways to avoid them. If seeing your uncle stresses you out, skip his New Year’s party and just stop by for a quick hello on New Year’s Day. Instead of staying in your bleak, childhood bedroom at your stepfather’s house, check into a nearby hotel. You really have more control than you think.
8. Ask for help -- but be specific. See if your spouse will lug out the decorations. Ask your sister to help you cook -- or host the holiday dinner itself. Invite a friend along on shopping trips. People may be more willing to help out than you expect; they just need some guidance from you on what to do.
9. Don’t worry about things beyond your control. So your uncle and your dad get into a fight every holiday dinner and it makes you miserable. But remember your limits. You can’t control them. But you can control your own reaction to the situation.
10. Make new family traditions. People often feel compelled to keep family holiday traditions alive long past the point that anyone’s actually enjoying them. Don’t keep them going for their own sake. “Start a new holiday tradition instead,” says Gloria Pope, Director of Advocacy and Public Policy at the Depression and Bipolar Support Alliance in Chicago. “Create one that’s more meaningful to you personally.”
11. Find positive ways to remember loved ones. Holidays may remind you of the loved ones who aren’t around anymore. But instead of just feeling glum, do something active to celebrate their memory. For instance, go out with your sisters to your mom’s favorite restaurant and give her a toast.
