How will reform affect early retirees?
A new article from CNN/Money examines the short-term implications of reform for a variety of populations, especially the uninsured and underinsured. While much of the press attention so far has focused on the benefits for un- and underinsured children, this article also clarifies the implications for early retirees:
To encourage companies facing higher costs in providing insurance, the legislation will jumpstart a temporary reinsurance program for employers who provide coverage to retired workers between the ages of 55 and 64, who are too young for Medicare.
Without this incentive, this demographic would have to go uninsured, or buy their own insurance – usually at higher rates – if they were dropped by their employer’s plan. The measure is expected to take effect in late June.“The government will refund all claims up to 80% of retiree claims valued between $15,000 and $90,000,” said Michael Sturm, principal and consulting actuary with consulting firm Milliman Inc.
The reinsurance program will exist until 2014 or until the $5 billion set aside for the program is exhausted, Sturm said.
To find out more about other implications for the un- and underinsured, read the full article here.