More companies are beginning to use private healthcare-exchange programs, similar to those being set up under Obamacare, to cover their retirees and to give participants more choices of plans at fixed costs, The Wall Street Journal Reports.
Time Warner Inc. is the latest corporation to announce the change, that will take effect Jan. 1, according to the Journal. It joins IBM, which also announced recently it would move 110,000 retirees off of its company-sponsored plan to an established private Medicare insurance exchange.
Time Warner said in a memo
the change to a healthcare exchange would give its former employees more insurance choices, while creating more stability for the company to predict costs.
For its part, IBM says the current retirees benefit plan has become increasingly more expensive and that the change will cut costs. The company will use Extend Health,
an exchange created in 2004 that already includes 300 companies, including 50 that are Fortune 500 companies.
"There are still quite a few others coming," said Bryce Williams, managing director of Towers Watson Exchange Solutions, the parent company of Extend Health.
"We are at the front end of the wave.
Under the new exchange system, retirees will get an annual payment through a health retirement account to purchase Medicare Advantage plans, supplemental Medicare polices, and pay for other medical expenses.
Williams said the change would understandably cause some initial concern for seniors.
"This starts out being scary for most people," he said.
However, Ariel Gonzalez, director of federal health and family government affairs for AARP, said his advocacy group and others see the exchanges as a positive development so long as benefits are not cut and costs remain low.
"If cost sharing becomes too burdensome for retirees, then that would definitely raise concerns," Gonzalez said.
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