Four out of five businesses that provide retiree health benefits do so with an eye toward accepting a government subsidy next year, which would be used to help prop up retiree drug coverage, according to a survey of 300 of the nation's largest private-sector employers conducted by the Kaiser Family Foundation and Hewitt Associates. Another 10% said that they would provide some drug coverage to supplement the new Medicare benefit, and 9% said that they plan to stop offering drug coverage to Medicare-eligible retirees altogether, according to the report released in Washington, D.C.
Overall, Tricia Neuman, director of the Kaiser foundation's Medicare Policy Project, said that the study's results mean good news for seniors in the short term, but she cautions that employers likely will revisit their health coverage options in years to come. Eighty-two percent of respondents said that they are either "very likely" or "somewhat likely" to continue drug benefits and accept employer subsidies in 2007. That number, however, shrinks when respondents were asked to project to 2010. At that point, only 50% said they would likely continue the program with subsidies, according to the report. -- by Matthew DoBias