Employer Provided Healthcare may be a Mixed Bag

In 1998, after twenty-seven years of employment, I was lured into retirement by the promise of subsidized healthcare premiums and a cash buyout. The following years were spent working at odd jobs and contributing a bit to my retirement accounts. I have never regretted the decision to retire early. With that in mind I found interesting a piece by Reuters, that cited a poll by Towers Watson reporting:
Fifty-nine percent of workers who plan to delay their retirement cited the need to keep their healthcare coverage as a reason, while 56 percent also blamed the decline in the value of their employer-sponsored retirement plan. The majority of workers who plan to delay retirement expect they will have to work for at least three years more than originally planned.
I rarely hear opponents of nationalized healthcare speaking to this issue. In a sense workers' plans to retire are held hostage to the healthcare coverage provided by their employer. Their plans are also impacted by the declining pension plans provided by Corporate America. You have to wonder what will happen in the future when the age eligibility for government programs like Social Security and Medicare is increased from sixty-five to seventy years.

I think that more and more of us will eventually be confronted by this strange partnership of employment and healthcare benefits when we consider our retirement options. Of course some may counter with the idea that seventy is a more realistic age to hang up the spurs than sixty-five. Yet I think a few of us may be disappointed by the need to work an extra few years just to be able to have healthcare insurance.

What do you think? Is the blessing of employer provided healthcare a mixed bag?


  1. I'm a ways from retirement, but I've long felt that tying your health insurance to your job is not a mixed bag, it's a bad idea.

    If I get sick and can't work, then I loose both my income and my insurance.

    If I end up out of work, I loose my coverage until I can find another job.

    If I get a long term illness, it may effect my ability to change jobs.

    My choice in insurance is dependent on what my employer chooses to offer and their priorities in shopping for coverage are different than mine.

    I'm insulated from the real cost of a top tier plan and given the choice between it or a lesser plan and the cost difference in my pocket, I may choose the cash.

    There was a story recently on NPR about folks with chronic illnesses who end up maxing out their lifetime limits on their health insurance. The implication then is that they have to change jobs every few years in order to reset their lifetime limits on coverage. The literally can't afford to stay in their jobs. The new insurance law eliminates such maximums, but this also illustrates the folly of employer provided insurance.

    Employer provided insurance skews the marketplace so that plans are tailored to the needs of the employer rather than the needs of the individual. If insurance were bought more by individuals, the insurance industry would come up with new alternatives to meet that need.

    To me, government provided insurance is the same thing, only different. Some of the problems are eliminated or minimized, mainly the portability aspect, but you still have another entity deciding what your coverage should be and their priorities likely don't match your own.

  2. Well, I'm retired,and Medicare is paying our medical bills. My hubs was diagnosed with prostate cancer this year, and had treatments. MC approved, and our secondary picked up the 20% the MC didn't pay. The hospital and DR's had to eat a lot. I'm not sure what the answer is for the healthcare crisis in America,but we paid for our own insurance. It was a major medical plan with $10K deductible, then a 20% co-pay. I'm sure glad the hubs waited to get the cancer.

    I think if people would use there health insurance like we use car insurance, we'd all be better off. Too many people go the DR and expect their insurance to pick up the cost of everything. That isn't the way it should be. Think of how expensive our car insurance would be if they paid for gas, oil change, tires, etc. We use that insurance for major things.

  3. I've been on permanent disability for about 20 years. I HAD real good medical coverage from AT&T until Medicare became "Primary". Now my employee coverage rarely pays ANYthing except for the eroding prescription coverage. Yet I continue to contribute over $1000 year to keep my employee coverage "just in case". I've been tempted numerous times to drop it.

  4. @salguod - What a great comment! I agree that some entity will always be making decisions for us. I think that the govt is preferable to greedy corporations and insurance companies.

    @Linda - I like the auto insurance example. Yet I do wonder how much preventative maintenance would happen if folks had to pay for it themselves. Blood work and a doctor visit is quite a bit more expensive than an oil change and tire rotation.

    @itazuke - I had a similar experience with my first wife. We also had great AT&T coverage until she had to go on dialysis - she was also dumped and forced to go on Medicare.

  5. But, Kansas Bob, if everyone paid for preventative care, and no insurance would pay, then the DR's wouldn't have to bill the different companies, and they would get their $ the day the service was done. Too many people just expect their insurance to pay for everything.

    A lot of $ could be saved if the DR's didn't have to bill, and re-bill, and re-bill....

  6. Agree with you Linda. Insurance has skewed costs all over the place. Yet, alas, it is where we are today.


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