On Thursday, November 17, 2005, Emeriti Retirement Health Solutions hosted its first National Symposium—Medicare Reform and Retiree Health Care: The Social Contract.
Symposium agenda
Speaker biographies
Emeriti press release
Event Summary
The group examined the roles that the federal government, institutions, insurers and individuals are likely to play, or should play, with regard to retiree health care, in light of the largest expansion in Medicare's scope since its inception.
Dr John Rowe, Chairman and CEO of Aetna, reviewed the forces impacting retiree health care, as well as ways to deal with these pressures through plan design, consumer information and tools to help individuals make wise decisions. He also addressed the health care issues of the higher education community, with its rapidly aging workforce, slowing retirement patterns, escalating compensation and insurance costs, and FAS/GAS liabilities. He described the Emeriti Program as an innovative and important component of Aetna's strategy to meet the needs of the higher education community. Another aspect of Aetna's higher education strategy includes acquiring businesses that provide health insurance to part-time employees and students.
Brad Kimler, Senior Vice President, Fidelity Benefits Consulting Group, spoke about the rising costs of health care and employer medical insurance, and the pressures on retiree income and employee benefits. Unless employers help more, older employees will delay retirement. Employers and employees may need to accept some tradeoffs during active employment, such as high-deductible medical plans, in order to fund retiree health insurance, perhaps without greater expenditure overall. Employees will need to help prefund these expenditures. Brad outlined how the Emeriti Program is a model for this new approach through the use of VEBAs, which provide maximum tax advantages and flexibility. He also reviewed the pros and cons of HSAs for active employees.
John Palmer, Public Trustee of the Medicare and Social Security Programs and University Professor at Syracuse University, projected expenditures for Medicare over time that will far exceed those for Social Security. The Medicare trust fund is projected to be exhausted in 2020, 21 years faster than the Social Security trust fund. Funding for Medicare comes from payroll taxes, premiums, and general revenues. He also illustrated that Medicare out-of-pocket expenditures for a prototypical 65-year-old beneficiary currently account for 1/3 of the average Social Security benefit, rising to almost 2/3 at age 85. In 2025, that figure will be more than half the Social Security benefit at 65, rising to 80% at age 85 for that retiree. Some changes will need to be made in the Medicare benefits and funding. One change that is coming is a new income-related premium structure for Medicare Part B, which will be phased in beginning in 2007.
The final session was a panel discussion, moderated by Susan Dentzer, NewsHour Correspondent, with Marilyn Moon, Vice President and Director of the Health Program, American Institutes for Research; Paul Fronstin, Senior Research Associate, EBRI; and Michael Thompson, Principal, PricewaterhouseCoopers. Susan led a dynamic discussion on the future of Medicare, possible solutions to its financial problems, the role of institutions (higher education institutions in particular), and whether other countries had better models for providing health care to their population. The panel did not agree on any definitive solutions; but most thought that Medicare would be preserved in some form, with lesser benefits and higher costs.
This concluded the formal Symposium Program. Following that, Ken Cool, President of Emeriti, presented an optional session on Emeriti's response to the introduction of Part D, as well as Emeriti's innovative approach to the prefunding of retiree medical costs through tax-advantaged VEBAs, nationally accessible retiree medical plans, and reimbursement benefit for out-of-pocket medical costs.
We will be providing these presentations and visuals to be downloaded, so please watch this site for more information. If you would like additional information about the Emeriti Symposium or the Emeriti Program, please call the Emeriti offices at 1-866-685-6565.
