Employer-Sponsored Health Insurance for Retired Americans

Abstract

Prologue: In the closing hours of its 1989 session, the 101st Congress repealed most of the provisions of the Medicare Catastrophic Coverage Act of 1988, P.L. 100-360. The repeal, unprecedented in recent U.S. history, was spurred by the outrage of a vocal minority of senior citizens who objected not to the act's expanded benefits but to the requirement that elderly Americans finance these new benefits through an increase in their monthly Part B premium and a surtax. Less widely acknowledged, however, is the fact that nearly 30 percent of the elderly already receive health insurance benefits from a former employer. “Since these benefits are as broad and deep as those provided to active workers,” Michael Morrisey, Gail Jensen, and Stephen Henderlite state, “then they are much more generous than the ill-fated benefits offered in the catastrophic legislation.” This duplication of coverage sheds new light on affluent elders’ adamant refusal to accept the new law. In this article, Morrisey and his colleagues explore the extent to which elderly Americans receive retiree health benefits, an exercise they assert is necessary “to understand why the catastrophic act died or to build a new, more appealing program.” Their analysis also probes the issue of coordination of benefits between Medicare and the employer plans. Morrisey, who holds a doctorate in economics from the University of Washington, is a professor in the Department of Health Care Organization and Policy at the University of Alabama at Birmingham's School of Public Health. Jensen, an associate professor at Wayne State University's Institute of Gerontology, received her doctorate in economics from the University of Minnesota. Morrisey and Jensen recently published an article in Health Affairs (Fall 1989) tracing regional variations in health insurance coverage. Henderlite, who holds a master of public health degree in epidemiology from the University of Alabama at Birmingham, currently works with Morrisey as a statistical analyst.