The Changing Landscape of Retirement Healthcare

Written by , March 3, 2014

The Changing Landscape of Retirement HealthcareThe state of health care in the United States continues to be one of the most controversial issues of the day. Many things are starting to change in response to the Affordable Care Act, for example, as are the ways that we approach health care in general.

By the same token, more attention is being paid to how senior citizens are dealing with their retirement years from a financial perspective. With such a large number of baby boomers entering retirement over the past few years, the issues surrounding healthcare during retirement are becoming increasingly significant.

Here are some of the ways that the landscape of retirement healthcare is changing.

  • The Employer Safety Net is Disappearing. For a period of time in the U.S., employees were able to rely on being able to work at a single job for several decades, then be able to retire with an employer sponsored pension and healthcare plan. But employers have been cutting back on these programs recently, and have actually been cutting back for years. In fact, a recent study by the Kaiser Family Foundation concluded that among large companies that offer health coverage to their employees, the percentage who offer health coverage to retirees had declined from 66% in 1988 to 28% in 2013.
    • Even public sector employees who were promised a particular level of retirement benefits are finding that their benefits were inadequately funded. With many cities facing serious fiscal shortfalls (and in some cases even bankruptcy), these retirees may find themselves having to file lawsuits and fight in order to receive the benefits they were promised.
  • Medicaid. Medicaid is a Federal healthcare program that provides health services to low income individuals. An increasing number of new retirees are entering retirement without adequate resources, and there are currently almost 5 million low income seniors who receive Medicaid. Some experts forecast that an increasing number of senior citizens will become eligible for Medicaid in the coming years, and cause a further expansion in the system.
  • Medicare. Medicare is currently structured as a four part program, which can pay part of a retirees medical expenses across a wide range of services. Most U.S. workers become eligible for Medicare when they reach age 65, and as with Medicaid, the number of retirement age individuals who receive benefits from the Federal government continues to grow.
  • Many believe that the growth of the Medicare and Medicaid programs is unsustainable, and that significant changes will be necessary in order to ensure that the programs can remain in place in some form for future retirees. Despite the economics of the situation, however, there is a great deal of political will behind not cutting benefits for those who are already on the program. It’s likely that some type of change is necessary, but it’s far from clear as to what that change will be.

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