survey of retiree health benefits, 2007: a chartbook

1

Survey of Retiree Health Benefits, 2007:

A Chartbook

Jon Gabel, Heidi Whitmore, and Jeremy PickreignNational Opinion Research Center

September 2008Support for this research was provided by The Commonwealth Fund. The views presented here are those of the authors and not necessarily those of The Commonwealth Fund or its directors, officers, or staff. This and other fund publications are available online at www.commonwealthfund.org. To learn more about new publications when they become available, visit the Fund’s Web site and register to receive e-mail alerts. Commonwealth Fund pub. no. 1171.

http://www.commonwealthfund.org/

http://www.commonwealthfund.org/myprofile/myprofile_edit.htm

2

Among Firms Offering Retiree Health Benefits, the Percentage of Large Firms (200+ workers) Offering Retiree

Health Benefits to Medicare-Age Retirees, 1999–2006

76% 71% 73% 76% 78% 75% 81% 77%

0%

20%

40%

60%

80%

100%

1999 2000 2001 2002 2003 2004 2005 2006

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999–2006.

3

The Medicare Modernization Act of 2003:The Part D Prescription Drug Benefit

4

How Firms Offering Retiree Health Benefits with Prescription

Drug Coverage to Medicare-Age Retirees Responded to the Medicare Modernization Act, 2007

1%

7%

1%

2%

6%

2%

5%

2%

4%

2%

1%

1%

96%

92%

91%

96%

92%

90%

93%

93%

2%

1%

8%

4%

4%

4%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

1000+ Workers

Public

Private

500-999 Workers *

Public

Private

200-499 Workers

Public

Private

Total

Discontinue all retiree health coverage Offer without Drugs Offer with Some Drugs Don't Know

Source: CMWF/NORC Survey of Retiree Health Benefits: 2007.* Distribution is significantly different between Public and Private Firms by firm size.

5

How Firms Offering Retiree Health Benefits with Prescription

Drug Coverage to Medicare-Age Retirees Responded to the Medicare Modernization Act, 2007 vs. 2006

Sources: CMWF/NORC Survey of Retiree Health Benefits: 2007; CMWF/HSC Survey of Retiree Health Benefits: 2006.

2%

5%

1%

3%

1%

4%

93%

90%

93%

90%

4%

7%

2%

6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2007

2006

Public Employers *

2007

2006

Private Employers *

Discontinue all retiree health coverage Offer without Drugs

Offer with Some Drugs Don't Know

Note: No private firms of 1000+ workers were surveyed in 2006.

* Distribution is significantly different between 2006 and 2007.

6Sources: CMWF/NORC Survey of Retiree Health Benefits: 2007; CMWF/HSC Survey of Retiree Health Benefits: 2006.


50%

58%

68%

54%

13%

6%

8%

11%

14%

9%

9%

11%

24%

27%

15%

24%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2007

2006

Public Employers*

2007

2006

Private Employers*

Offer drug benefit that is at least equal in value to Part D benefit and accept subsidy

Offer supplement to Part D coverage

Establish own Medicare prescription drug plan

Don't know

Among Firms Offering Retiree Health Benefits to Medicare-Age Retirees with Some Drug Coverage, Structure of

Prescription Drug Benefit, 2007 vs. 2006

* Distribution is significantly different between 2006 and 2007.

7

Among Firms Offering Retiree Health Benefits withPrescription Drug Coverage to Medicare-Age Retirees in

2007,Is Drug Coverage More or Less Generous than in 2006*

7%

4%

3%

3%

3%

4%

2%

5%

8%

6%

9%

5%

6%

5%

8%

85%

87%

86%

79%

86%

86%

86%

85%

4%

1%

5%

9%

6%

7%

5%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

1000+ Workers

Public

Private

500-999 Workers

Public

Private

200-499 Workers

Public

Private

Total

More Generous Less Generous No Change Don't Know

Source: CMWF/NORC Survey of Retiree Health Benefits: 2007.

* Tests found no significant distributions between Public and Private Firms by Firm Size.

8Sources: CMWF/NORC Survey of Retiree Health Benefits: 2007; CMWF/HSC Survey of Retiree Health Benefits: 2006.


4%

6%

2%

5%

5%

3%

8%

4%

86%

80%

85%

86%

5%

10%

5%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2007

2006

Public Employers

2007

2006

Private Employers

More Generous Less Generous Same Don't Know

Among Firms Offering Retiree Health Benefits with Prescription Drug Coverage to Medicare-Age Retirees, Will

Drug Coverage Be More or Less Generous Than One Year Ago*

* Tests found no significantly different distributions between 2006 and 2007.

9

Among Firms Offering Retiree Health Benefits with Prescription Drug Coverage to Medicare-Age Retirees, How

Likely Is Firm to ChangeIts Response to Medicare Part D Benefit in Next Two Years*

2%

6%

2%

1%

7%

6%

4%

5%

16%

22%

22%

23%

16%

19%

17%

21%

43%

34%

26%

30%

30%

22%

32%

30%

30%

31%

39%

43%

38%

40%

36%

37%

10%

7%

11%

3%

10%

14%

10%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

1000+ Workers

Public

Private

500-999 Workers

Public

Private

200-499 Workers

Public

Private

Total

Very Likely Somewhat Likely Not Too Likely Not at All Likely Don’t know

Source: CMWF/NORC Survey of Retiree Health Benefits: 2007.* Tests found no significant distributions between Public and Private Firms by firm size.

10Source: CMWF/NORC Survey of Retiree Health Benefits: 2007.

44%

44%

69%

73%

77%

85%

52%

49%

28%

20%

18%

15%

4%

7%

2%

8%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

If Part D Benefits are Cut

Public

Private

If Part D Benefits Get More Generous

Public

Private

If Costs Rise

Very or Somewhat Likely Not Likely Don't Know

Likelihood of Employers’ Changing Response to Medicare Part D

Prescription Drug Benefit If Various Changes Occur, 2007*

* Tests found no significant distributions between Public and Private Firms by response.

11

Among Employers Offering a Drug Benefits to Medicare-Age Retirees That Is Expected to Be the Primary Drug Coverage,

Percentage of Employers That Would Allow Retirees to Enroll or Re-Enroll in Employer’s Plan at a Future Date If Retiree Signs up

for a Medicare Part D plan, 2007*

45%

32%

48%

64%

8%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public Employers

Private Employers

Yes No Don't Know


* Distribution is significantly different between Public and Private Firms.

12

Percentage of Employers That Made Various Changes toRetiree Health Benefits in the Past Two Years

35%

19%

25%

5% 5%

11%

2%

26%

14%

21%

3% 4%2% 1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Increasedretiree shareof premium*

Increasedcost-sharing

for officevisits

Increasedcost-sharingfor drugs

Replaced drugcopays withcoinsurance

Reduced levelof benefits

Droppedretiree

benefits fornew hires*

Droppedretiree

benefits foractive

workers

Private Employers Public Employers


* Estimates are significantly different between Public and Private Firms.

13

Percentage of Employers Planning on Making Various Changes^

to Retiree Health Benefit in the Next Two Years

53%

39%43%

22%

13%

19%

10% 10%

47%

35%38%

15% 14%

9%

3%

8%

0%

10%

20%

30%

40%

50%

60%

Increaseretiree shareof premium

Increase cost-sharing foroffice visits

Increase cost-sharing for

drugs

Replace drugcopays withcoinsurance

Reduce levelof benefits

Drop retireebenefits fornew hires*

Drop retireebenefits for

activeworkers*

Drop benefitsfor medicareage retirees

Private Employers Public Employers



^ Sum of very or somewhat likely.

14

Governmental Accounting Standards Board Regulations (GASB)

15

Percentage of Public Employers Familiar with GASB Regulations, 2007 vs. 2006*

5%

5%

12%

11%

28%

25%

17%

20%

20%

12%

23%

25%

23%

51%

36%

36%

38%

3%

0%

1%

23%

11%

8%

19%

31%

16%

24%

34%

30%

32%

28%

33% 44%

32%

39%

2%

1%

0% 20% 40% 60% 80% 100%

2007

2006

1000+ Workers

2007

2006

500-999 Workers

2007

2006

200-499 Workers

2007

2006

Total

Very Familiar Somewhat Familiar Not Too Familiar Not At All Familiar Don't Know



16

Among Public Employers Familiar with GASB,Percentage Concerned About Financial Impact of

Complyingwith GASB Regulations, 2007 vs. 2006*

52%

52%

43%

30%

29%

3%

4%

6%

12%

2%

9%

8%

8%

3%

7%

48%

50%

60%

32%

32%

35%

26%

11%

10%

7%

8% 6%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2007

2006

1000+ Workers

2007

2006

500-999 Workers

2007

2006

200-499 Workers

2007

2006

Total

Very Concerned Somewhat Concerned Not Too Concerned Not At All Concerned Don't Know


NSD

NSD

Note: NSD = Not Sufficient Data.


17

Among Public Employers Familiar with GASB, Have or Will These Employers Make Various Changes to Retiree Health

Benefits, 2007


12%

25%

20%

17%

14%

11%

5%

0%

5%

10%

15%

20%

25%

30%

Reduce financialcontribution

Increaseemployee

contributions

Increase cost-sharing

Change eligibility Reduce level ofbenefits

Reduceprescription drug

coverage

Drop retireebenefits

18

Among Public Employers Familiar with GASB, Percentage of

Public Employers That Have Calculated the Additional Cost of Retiree Health Coverage as a Result of GASB, 2007

55%

3%

14%

6%

7%51%

38%

63%

42%

32%

56%

34%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1000+ Workers

500-999 Workers

200-499 Workers

Total

Yes No Don't Know


* Tests found no significantly different distributions between Size Group and Total Firms.

19

Retiree Health Benefits for Medicare-Age Retirees, 2007

20

Among Firms Offering Retiree Health Benefits to Medicare-Age Retirees, Percentage of Active Workers That Will Be Eligible for Retiree Health Benefits After They Retire and Become Eligible

for Medicare, 2007

75%

85% 88%

72%

97% 95% 98%60%

0%

20%

40%

60%

80%

100%

Total* 200-499Workers

500-999Workers

1000+Workers*

Private Firms Public Employers



21

Average Annual Premiums and Retiree Premium Contributions

for a Medicare-Age Retiree with Single Coverage inFirm’s Largest Health Plan, 2000–2007

Sources: CMWF/NORC Survey of Retiree Health Benefits: 2007; CMWF/HSC Survey of Retiree Health

Benefits: 2006; Kaiser/HRET Surveys of Employer-Sponsored Health Benefits Public Use Files: 2000,

2001, 2004.

Total Monthly Premium

Retiree Contribution as a Percentage of

Total Premium

Private & Public 2000 $178 25%

2001 $193 28%

2004 $276 25%

Private 2006 $318 24%

Public 2006 $320 36%

Private 2007 $342 39%

Public 2007 $325 41%

22

Type of Health Plan with the Largest Number of Medicare-Age Retirees Enrolled, 2007*

53%

49%

13%

16%

9%

5%

19%

15%

6%

15%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Private Firms

Public Employers

PPO HMO POS Conventional HSA-eligible HDHP Other


* Distribution is significantly different between Public and Private Firms.

23

Among Firms Offering Retiree Health Benefits to Medicare-Age Retirees, Percentage of Retirees Receiving Benefits from

Employers That Have Capped Contributions for Spending on Medicare-Age Retirees, 2007*

27%

15%

11%

32%

12%

18%

10%12%

0%

5%

10%

15%

20%

25%

30%

35%

Total 200-499Workers

500-999Workers

1000+ Workers



* Tests found no significantly different estimates between Public and Private Firms by firm size.

24

Average Monthly Premiums for Medicare-Age Retirees inLargest Health Plan, Single Coverage, 2007

$342

$375

$293

$323$310

$339

$379

$341$333

$466

$402

$312

$356 $351

$302

$427

0

50

100

150

200

250

300

350

400

450

500

Total 200-499Workers

500-999Workers*

1000+Workers

Northeast Midwest South West

($)



* Estimates are significantly different between Public and Private Firms by firm size or region.

25

Average Annual Deductibles for Medicare-Age Retirees inLargest Health Plan, Single Coverage, 2007

$263

$150

$264$283

$125

$193$181

$118

0

50

100

150

200

250

300

Total* 200-499Workers

500-999Workers

1000+Workers*

($)



* Estimates are significantly different between Public and Private Firms by firm size.

26

Distribution of Type of Cost-Sharing for Office Visits forMedicare-Age Retirees in Largest Health Plan, 2007*

47%

39%

49%

51%

59%

53%

47%

43%

22%

46%

20%

31%

19%

9%

22%

39%

12%

0%

1%

0%

2%

6%

11%

1%

20%

14%

29%

18%

20%

31%

20%

17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

1000+ Workers

Public

Private

500-999 Workers

Public

Private

200-499 Workers

Public

Private

Total

Co-Payment Coinsurance Both None


* Tests found no significantly different distributions between Public and Private Firms by firm size.

27

Percentage of Medicare-Age Retirees with a Separate Annual Deductible for Prescription Drugs in Largest Health

Plan, 2007*

20%

15%

8%

14%

18%

11%

11%

14%

0% 5% 10% 15% 20% 25%

Public

Private

1000+ Workers

Public

Private

500-999 Workers

Public

Private

200-499 Workers

Public

Private

Total


* Tests found no significantly different estimates between Public and Private Firms by firm size.

28

Average Annual Prescription Drug Deductibles for Medicare-Age Retirees in Largest Health Plan, 2007*

$90

$152

0

20

40

60

80

100

120

140

160


($)


* Tests found no significantly different estimates between Public and Private Firms.

29

Distribution of Medicare-Age Retirees with Various Cost-Sharing Formulas for Prescription Drug Coverage in Largest

Health Plan, 2007

7%

6%

2%

2%

1%

2%

6%

5%

61%

53%

44%

79%

44%

44%

59%

55%

31%

9%

33%

10%

46%

19%

32%

10%

1%

24%

19%

6%

6%

34%

3%

23%

8%

2%

1%

6%

3%

2%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

1000+ Workers

Public

Private

500-999 Workers*

Public

Private

200-499 Workers

Public

Private

Total*

Four Tier Three Tier Two Tier Same None Other


* Distributions are significantly different between Public and Private Firms by firm size.

30

Distribution of Type of Prescription Drug Cost-Sharing forGeneric, Preferred, Non-Preferred, and Lifestyle Drugs for

Medicare-Age Retirees in Largest Health Plan, 2007*

89%

64%

89%

63%

91%

63%

10%

24%

8%

25%

8%

29%

1%

12%

3%

12%

1%

3%5%

Public

Private

Non-Preferred Drugs

Public

Private

Preferred Drugs

Public

Private

Generic Drugs

Co-Payment Coinsurance Both Neither


Private

Public Employers

Note: Responses may not add to 100% because of rounding.

* Tests found no significantly different distributions between Public and Private Firms by drug type.

31

Among Medicare-Age Retirees with Copayments for Prescription Drugs, Average Copayments in Largest Health

Plan, 2007*

$9.05

$23.88

$44.00

$8.41

$21.64

$38.67

0 10 20 30 40 50

Generic Drugs

Preferred Drugs

Non-PreferredDrugs

($)

Private Public Employers


* Tests found no significantly different estimates between Public and Private Firms.

32

Distribution of Medicare-Age Retirees with Various AnnualOut-of-Pocket Limits in Largest Health Plan, Single

Coverage, 2007

30%

5%

26%

6%

17%

18%

29%

7%

36%

34%

22%

44%

23%

45%

35%

37%

1%

28%

10%

14%

15%

13%

2%

24%

1%

1%

5%

16%

8%

2%

2%

3%

1%

14%

4%

2%

2%

5%

11%

32%

19%

33%

19%

35%

17%

32%

19%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Public

Private

1000+ Workers*

Public

Private

500-999 Workers

Public

Private

200-499 Workers

Public

Private

Total*

$999 or Less $1,000 - $1,999 $2,000 - $2,999 $3,000-$3,999 $4,000-$4,999 $5,000 or More No Limit


* Distributions are significantly different between Public and Private Firms by firm size.

survey of retiree health benefits, 2007: a chartbook

Documents

sponsored health benefits

private firms

medicareage retirees

prescription drug coverage

medicare modernization

percentage of large

d prescription drug

prescriptiondrug coverage