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Health Insurance Reform Facts for Retirees and “Pre-Medicare” Retirees


Health Insurance Reform Facts for Retirees and “Pre-Medicare” Retirees

  • There is no health insurance reform proposed before Congress that would create death panels, allow euthanasia, ration care or that directly addresses government-funded abortion or birth control. Anything else you hear is a myth – a scare tactic to divert attention from the real issue.
  • Even if you have employer- or union-provided health care as a retiree, health insurance reform matters to you. Besides helping those who aren’t as lucky, reform should help cut costs across our entire health care system, making it better and more affordable for all of us.
  • Medicare was created to make sure Americans didn’t have to choose between saving their health and spending all they had saved. It provided for those with the burdens and pains of untreated illnesses. Now, we find ourselves in a critical moment, facing strangely familiar syndromes of societal suffering, and are called to find a way to provide health care for all Americans.
  • Health care reform means strengthening Medicare by slowing spending, cleaning up waste and taking control of rising costs that are crippling our entire health care system. If we fail at health insurance reform, Medicare cuts are up next.
  • Before Medicare, growing old meant poverty, disability, and going without health insurance. Before Medicare, only half of all older Americans had health insurance and 35 percent of seniors lived in poverty. Today, levels of poverty among seniors have dropped by two-thirds and all Americans 65 and older can get health insurance through the Medicare program.
We believe real reform will include:

• A robust public plan to compete with private insurers and help drive down costs,
• Real “pay or play” – covering all employers
• Relief for companies and unions that provide pre-Medicare retiree coverage, and
• No taxation of health benefits either directly or indirectly.

Regarding relief for companies and unions that provide pre-Medicare retiree coverage, here are
some helpful facts:
• Many Americans between the ages of 55-64 – the “bridge years” – struggle with declining income and health but with more limited access to health care at increasingly higher costs;
• Retirees in this age group who do have employer-sponsored coverage have been forced to shoulder an ever-larger share of the cost of health care.
• A good way to help keep employer-sponsored coverage for retires in the 55-64 age group is to help shoulder some of these higher health costs by having a temporary reinsurance program.
• Currently about four million pre-Medicare retirees receive health insurance coverage from their former employers or a VEBA (Voluntary Employees' Beneficiary Association.) A reinsurance program will encourage employers and VEBAs to continue this coverage, by providing assistance with some of their catastrophic expenses.
(A reinsurance program would provide significant relief to employers and VEBAs so that they can keep providing insurance to this vulnerable pre- Medicare retiree population.)

• A temporary reinsurance program should reimburse for significant claims. The House and
Senate HELP bill provide for an 80 percent reimbursement for health claims ranging from
$15,000 to $90,000.
• Importantly, the reinsurance provision rightly provides for a dedicated funding mechanism -
- the “Retiree Reserve Trust Fund” – that is funded with $10 billion. This provides the certainty needed to make the temporary measure work.

Visit www.usw.org and the Alliance for Retired Americans’ Web site, www.retiredamerican.org, for more information on why health insurance reform is important to retirees, and for facts addressing common myths.

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