February 3, 2016

Michael DiLorenzo, COO, Michigan Planners

According to a recent study published by HealthView Services, a designer of healthcare projection software, Michigan ranks among the most expensive states when it comes to out-of-pocket healthcare costs for retirees.

This is not good news for organizations trying to maintain a comprehensive retiree healthcare plan.  Budgetary constraints, rising premiums, and longer life expectancies cause great roadblocks for those governmental entities that are contractually obligated to provide retiree healthcare.

While shifting costs may be one alternative, it is never an employer’s first choice.  …Neither is raising deductibles or eliminating healthcare altogether.

Entities throughout Michigan have taken a unique approach to address this concern by implementing a group Medicare Advantage plan.

These plans, offered by private carriers, add additional benefits to the Medicare hospital coverage that is provided to retirees once reaching the age of 65.  The Advantage plan, when paired up with Original Medicare A & B coverage, provides a comprehensive package, affordable to both retirees and the sponsoring entity.

While the annual premium increases vary by group, the renewal increases have typically been single digits, resulting in a very practical and long-term strategy for entities that desire to continue to offer affordable care to the retiree population.

As an added bonus, placing the retirees on a separate program reduces claims liability and exposure, supporting the stabilization of experience rated renewals and self-funded claims spend.  The programs serve as a mechanism that makes budgeting easier and more predictable.

Remaining proactive and aggressive in cost containment is crucial for any organization that is serious about managing costs.  The days of passive management – for both active and retired employees – have long since expired.

For questions regarding Medicare Advantage programs, and other areas of employee benefits management, please contact Michael DiLorenzo at (800) 674-9235.

Michigan Planners is a statewide employee benefits agency with more than 50 years of experience.  With offices located in Traverse City and Clinton Township, they serve as a long-term strategic partner in the design, implementation and management of employer sponsored benefits.