Annu. Rev. Publ. Health. 1993. 14:271-92
Copyright © 1993 b Annual Reviews 1nc. All rights reserved
RETIREE HEALTH BENEFITS
M. A. Morrisey
Lister Hill Center fr Health Policy ad Department of Health Care Organization
ad Policy, University of Alabama at Birmingham, Birmingham, Alabama 35294
KY WORS: elderly, healthinsrance, Medicare, medigap, employers
INTRODUCTION
n this paper, we review what is known about the private health insurance
heldbytheelderlyintheUnited States.Virtually all personsoverage65are
coveredby theMedicareprogram. However,nearly80%oftheelderly also
have some orm of private coverage. This coverage falls into two broad
categories individually purchased and employer sponsored. The former
includes the well-known medigap" policies, as well as extra cash,"
indemnity, speciicdisease, andnursinghomepolicies.Employer-sponsored
coverageisgenerallyoftwotypesactiveworkercoverageprovdedtothose
persons, andtheirdependents,whoareover age 65 and stillemployed, and
postretirement coverage forthose workers, and their dependents, who have
retired.
Ahostofpublicpolicyissuesare asociatedwithretireehealthinsurance.
The ill-fated Medicare Catastrophic Coverage Act, for example, sought to
extendMedicareforextendedacutecareservicesandprescriptiondrugs.et,
many of the lderly already had coverage for these services and saw the
program as requiring additional taxes with no additional benefits. urther,
there is growing evidence that the Medicare program efectively subsidizes
the cost of retiree health benefits. There have been calls for taxes on
supplementalplanstoeliminatethissubsidy.
Somehavebeenconceredthattheelderlyareunabletochooseintelligently
amongtheaayofmedigapandindividallyavailableretireeheathinsurance
policies.Allegedly,theelderlyhaveneedlesslypurchasedmultipleduplicative
policiesúAsaresult,somestateshaverestrictedthe rangeofoptionsavailable
andprovidedconsumerswithguidestohepurchaseofinsurance. Thefederal
goverment enacted the aucus amendment in 1982 to encourage states to
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