Kerry Provision to Protect Retiree Health Coverage Starts Helping Massachusetts Seniors

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Kerry Provision to Protect Retiree Health Coverage Starts Helping Massachusetts Seniors

WASHINGTON, D.C. – The U.S. Department of Health and Human Services (HHS) today announced its plans to implement Senator John Kerry (D-Mass.)’s program to make retiree health insurance coverage more stable and affordable.

HHS today announced the first round of applicants accepted into the Early Retiree Reinsurance Program, which will protect health coverage for early retirees. This new program originated as a provision authored by Senator Kerry as part of the health reform legislation signed into law earlier this year. Nearly 2,000 employers, including 77 in Massachusetts, have been accepted into the program and will begin to receive reimbursements for employee claims this fall.

“For workers who did back-breaking work all their lives, this is a huge tangible difference. Forget about the political consequences, this is why health reform was so damn important. This is especially for Massachusetts because our state boasts so many early retirees and this will reduce health care costs, substantially lower premiums, and prevent the continued erosion of employer-sponsored retiree coverage across the country. I’m glad that Senator Stabenow and I fought and won the fight to include this effort in health care reform for retirees aged 55 to 64 years old.”

The Early Retiree Reinsurance Program officially began in June of this year. It allows employers to receive reinsurance reimbursements for their retirees with catastrophic medical expenses. Employers who participate in the program can receive a reinsurance reimbursement of up to 80 percent of catastrophic medical claims between $15,000 and $90,000 for their early retiree enrollees. The reimbursement is used to reduce the employer’s health care costs and to lower premiums to retirees and their families. A study from Hewitt Associates estimates that the program will reduce the cost of retiree coverage from 25 to 35 percent – anywhere from $2,000 to $3,000 per retiree, per year.

In Massachusetts, about 79,000 retirees rely on health coverage through their former employers before they become eligible for Medicare. The Early Retiree Reinsurance Program will encourage employers to continue offering health coverage to their employees by providing immediate financial relief to cover those with costly medical expenses. The program ends on January 1, 2014. This is when important insurance reforms to prevent older Americans from being charged exorbitant premiums go into effect nationwide and when early retirees will have access to additional coverage options in the health insurance exchanges.

The Department of Health and Human Services’ Office of Consumer Information and Insurance Oversight has approved nearly 2,000 plans in this first round of approvals, with more applications being reviewed every day.

The following is a list of the 77 organizations in Massachusetts that have been approved in the first round:

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