The Corporate Shift to Medicare Advantage for Retirees - Forbes
“Back in the old days” many large companies, as well as municipal governments, offered retirees healthcare for life, usually through an array of funded options for insurance plans which supplement the benefits available through the nation’s main senior healthcare program – Medicare. But as healthcare costs have risen, so has the propensity of corporations and municipalities to cut costs by offering retirees more limited supplemental coverage using special Medicare Advantage plans. Medicare Advantage plans from private insurers usually limit enrollees to a specific network of providers, compared to Medicare Supplement plans which have no such limit, and have other limitations as well. To be fair, Medicare Advantage plans usually also provide somewhat expanded coverage which includes services “original Medicare” does not. Nevertheless, the shift to Medicare Advantage as a corporate (or municipal) cost saving strategy is palpable – most recently by such titans as IBM, AT&T, and notably, the City of New York (which has about 250,000 retired employees). As might be expected, many retirees are crying “foul” believing that a promise has been broken or, in the case of NYC that a contract obligation has been breached. In the latter case, a judge has issued an injunction temporarily preventing the city from implementing its shift to Medicare Advantage, but the shift to Medicare Advantage as a corporate or municipal cost saving strategy is clearly happening, as explained in this Forbes article by Diane Omdahl.