Many retirees find empty insurance promises

From Knight Ridder via the Houston Chronicle:

That left Stish in the same predicament as countless retirees caught in an unaffordable health insurance trap they never expected. Company-paid health insurance for retirees is becoming extinct as companies try to slash costs and increase profits.

While federal law requires companies to deliver the pensions they promised workers, no such legal obligation exists for health insurance.

Eleven years ago, 46 percent of large U.S. companies helped retirees with health insurance, but now just 28 percent continue to do so, says researcher Paul Fronstin of the Employee Benefits Research Institute. Among all U.S. companies, 11 percent provide retirees with health insurance.

Fronstin says current workers of any age should not expect the benefit when they retire unless they work in some government jobs or are protected by a union contract that guarantee coverage. His warning allows people who still have jobs to plan for their future, but retirees don't have the luxury of time or a paycheck.

In the past few years, retirees like Stish were taken by surprise when an employer went broke or was acquired by another company that didn't want to continue their health benefits.

Others have lost insurance because former employers wanted to avoid spiraling health insurance costs, or they could bolster corporate profit quickly through an accounting maneuver that can turn disbanded insurance liabilities into instant income.

Click here for more on how the American health care crisis continues.

I posted a link to a story a few days ago about a similar problem facing people with health insurance who haven't yet retired. My statement about the story suggested that the Feds should just buy out the health insurance industry and establish a single-payer plan.

That idea elicited this exchange on the Real Art comment boards, which is worth repeating here:

What would they buy them out with? The money they got from the lobbyists for the greedy, immoral insurance companies?

I swear, you commies just don't know how this stuff works.

Madmartigan

My response:

Hmmm. Screw the lobbyists. That's not a bad idea at all.

You do realize, I hope, that no self-respecting communist would ever suggest that the government buy out any business. Commies simply take what they want, and too bad for the capitalist pigs who lose their capital. Actually, I don't think that money's really a problem here. As our current simian chief executive has shown, the US has billions to burn on foreign military adventures: I think we could easily do the same with this, except this time it would be to save countless lives, rather than to end them. But you've got me convinced. Screw the capitalists. Let's not buy out anything at all. Just shut the mothers down.

It would be really nice to hear all the capitalist pigs squeal like...well, pigs.

Ron

Then I got to thinking, and added this follow-up:

Further thought:

It seems fair to think that the macroeconomic gain that would come from businesses and corporations no longer having to dole out for their employees countless dollars to various health care plans, and a probable boost in consumer spending thanks to a windfall of newly found discretionary income which had previously been used to pay for insurance premiums and deductibles, or out of pocket expenses for the uninsured...now what was my point again? Oh yeah, the economic benefits that would come from buying out the health insurance industry would more than offset any economic disruption caused by the feds taking on new debt to pay for it. In other words, the health care racket as it exists now is a drag on the economy. Changing to a single-payer plan would remove that drag. It pays for itself.

Or we could just raise taxes. On the rich. How about that?

And Madmartigan says I don't know how this stuff works.

Ron

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