My mother is the widow of a 3M retiree and as such has been covered by their Retiree Medical Plan for years and years. Just yesterday “the letter” arrived:
"October 2010
“Dear 3M Medicare Eligible Retiree or Surviving Spouse: The recently enacted health care reform law has fundamentally changed the health insurance market. Health care options in the marketplace have improved, and many readily available individual insurance plans in the Medicare marketplace provide benefits more tailored to your personal needs often at lower costs than what you pay for retiree medical coverage through 3M. Our retirees can’t afford to ignore these improvements in the Medicare marketplace. On the other hand, health care reform has made it more difficult for employers like 3M to provide a plan that will remain competitive, compliant, and cost effective for both you and 3M.
“Today we are announcing that the 3M Retiree Medical Plan for Medicare eligible participants will not be available beyond December 31, 2012."
Go back and read the above carefully. Maybe twice. Look for the nuance in the language. Giving health reform legislation credit for improving the marketplace is – in my opinion – debatable. The individual options my mother must now consider have been out there for years. Until I review them, I’ll just guess a Medicare Advantage Plan with a zero (or very low) premium will do nicely. In fact, reform has made providing retiree coverage "more difficult" to be "competitive" and "compliant."
Translation: reform has pushed 3M’s costs over the edge. Again – in my opinion – they just don’t want to come out and say it. (How did McDonald’s fare in the press this week?)
So with this Fortune 500 company setting the pace, expect others to follow. Frankly, what employers in the public and private sector pay for retiree health insurance has baffled me for years.
Jon Rauser is president of The Rauser Agency Inc., Milwaukee. He writes an ongoing blog about the health care industry at www.rauserhealthreview.com.
