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November 08, 2004

Employers Slashing Benefits

Bush is presiding over the complete government takeover of health care for retirees. That's the result of employers' elimination of benefits for retirees across the country, forcing them to rely almost exclusively on Medicare:

Unless the benefits are guaranteed in a labor agreement, companies generally are not obligated legally to maintain these entitlements. Faced with surging medical costs and burgeoning retiree populations, many employers are trimming their contributions to existing retirees' health coverage and eliminating coverage entirely for future retirees.

Thirty-six percent of large firms offer the benefit, down from two-thirds in 1988, according to a 2004 study by the Henry J. Kaiser Family Foundation.

An estimated 12 million seniors covered by Medicare also get benefits from employers, according to human relations consultant Hewitt Associates. An additional 3 million younger retirees between the ages of 55 and 64 rely on company benefits to bridge the gap until Medicare kicks in.

Yet the ranks of companies that continue to provide such benefits are rapidly dwindling.

Ten percent of large companies eliminated all subsidized health benefits for future retirees last year, according to a 2003 survey by Kaiser and Hewitt.

More telling, 20 percent said they are "very likely" or "somewhat likely" to terminate all subsidized benefits for future retirees in the next three years.

Make no mistake-- Bush's complete neglect is allowing employers to abandon commitments made to retirees over decades to pay for their health care and pensions.

And the result is not just a worse life for those retirees but more costs for existing taxpayers, as those costs are absorbed by the government.

Posted by Nathan at November 8, 2004 07:11 AM