New York Times Examines Controversy Over Subsidies to Employers Providing Retiree Drug Benefits

Main Category: Seniors / Aging
Article Date: 02 Feb 2005 - 0:00 PDT

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.The New York Times on Monday examined the "furious debate" resulting from the release of final rules governing the new Medicare prescription drug benefit that allow "employers to collect billions of dollars in federal subsidies" for maintaining retiree drug coverage, even if they reduce the benefit amount (Pear, New York Times, 1/31). Under the new prescription drug benefit, Medicare will provide tax-free subsidies to employers equal to 28% of retired workers' annual drug costs. To qualify for the subsidy, employers will be required to offer a prescription drug plan at least as generous as the Medicare coverage, and they will be required to contribute at least as much as Medicare (Kaiser Daily Health Policy Report, 1/28). However, critics say and Medicare officials acknowledge that it will not always be the case that employer-sponsored retiree drug benefits will be at least equal in value to those offered under Medicare, the Times reports (New York Times, 1/31).

"Reprinted with permission from kaisernetwork.org kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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