Thumbs Up Good News for Retirees

Physician's Money Digest, June15 2004, Volume 11, Issue 11

Many retirees are sufferingthrough a crisis in health careas companies cut back benefits, raisepremiums, and boost deductibles andcopayments in an effort to trim thecost of health coverage. The newMedicare law may relieve some ofthat cost pressure, however, becauseit includes a subsidy for companieswith retiree health benefit plans.Designed to encourage companiesnot to drop retiree programs andpush millions of people onto theMedicare rolls, the subsidies havemany corporate bean counters crunchingthe numbers and finding theylook quite rosy. Although the subsidywon't kick in for another 2 years, acompany can use accepted accountingrules to beef up its current bottomline, applying the anticipatedpayments to offset and reduce estimatedliabilities for retiree healthbenefits programs.