Insurance Companies Targeting Early Retirees

Alliance for Retired Americans

Older Americans in Medicare’s Part D prescription drug program are more likely to pay at least $300 a month for medicines than those on other plans, a study published Tuesday by the journal Health Affairs has found.

Experts consider the poll of more than 16,000 seniors, performed by the Kaiser Family Foundation, the Commonwealth Fund, and the Tufts-New England Medical Center, the closest thing yet to a “report card” on Part D.

The study found that 8 percent of seniors in the government’s Medicare plans spent $300 or more out-of-pocket for drugs, compared with 5 percent for both those covered by the Veterans Affairs Department, which negotiates prices for drugs it covers, and those covered by workplace insurance.

Medicare recipients were also more likely to delay or forgo filling prescriptions because of the expense, with one in five enrollees saying they had put off or even skipped getting some medications because of Part D’s high costs. Part of the reason so many beneficiaries are having difficulty paying for their medications is that many low-income seniors apparently do not know that they can get additional government subsidies to lower their costs, the survey indicated.

Congressional Democrats, who have proposed expanding the number of seniors eligible for such subsidies by cutting over-payments to private Medicare Advantage plans, seized on the findings as evidence that the benefit is not working well for those who need it most: seniors who have several chronic illnesses and must take a number of medications.

According to a recent report by The Wall Street Journal, health insurance companies are targeting those who are least likely to be covered by their employers, including early retirees who are too young to qualify for Medicare Help.

Retirees aged 50-64 are the second-fastest growing group of uninsured Americans, as increasing numbers of companies cut retirement benefits and leave them stuck in a gap after stopping work and before Medicare eligibility. While some companies have already begun marketing their individual medical policies to older Americans, others plan to release specially designed packages for retirees in the next few months. However, some are critical of the new plans, mainly available in states where laws allow insurers greater ability to choose only the healthiest customers.

Nationally, an average 30% of 60- to 64-year-olds who apply for a new health insurance policy is rejected. To make premiums more affordable, many early retirees are choosing plans with deductibles as high as $5,000 or $10,000 and fewer benefits, in exchange for premiums as low as $84 a month.

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