INSURANCE CUTS FOR RETIRED EMPLOYEES
On April 22, 2004, the EEOC (Equal Employment Opportunity Commission) voted to allow employers to reduce or eliminate health benefits for retirees when they become eligible for Medicare at age 65. The 3-1 vote maintains that such cuts do not violate civil rights law banning age discrimination. According to Stuart J. Ishimaru, who cast the only no vote, "The proper role of the commission, [he] said, is not to make health policy, but to protect people from discrimination."
This ruling could create a potentially explosive political issue because it's already creating deep worry for many of the 12 million Medicare beneficiaries who receive such benefits from former employers. The decision is supported by employers because under this change, the American taxpayer will now assume the burden of everyone else's medical care over the age of 65. Employer sponsored health care plans help retirees pay any medical expenses not covered by Medicare.
According to Bob Chapman who writes The International Forecaster:
"What a sellout of the American worker. The rule creates an explicit illegal exemption to the Age Discrimination in Employment Act of 1967. A federal appeals court ruled in 2000 that such age-based distinctions were unlawful. The rule is a reversal of the position that the commission took in a court case and in a national policy statement in October 2000. "
According to the Wall Street Journal on January 8, 2004, U.S. Drug Subsidy Benefits Employers, "When Congress approved prescription-drug benefits for Medicare recipients last year, it granted benefits for the 65% of large employers with retiree health-care plans, providing funds for companies that maintained their prescription-drug coverage for retirees. The program is supposed to encourage employers to retain prescription-drug coverage."
This subsidy for big corporations amounts to a $69 billion dollar bill to be paid by all Americans. Medicare currently provides coverage for 51 million individuals, 15.6 million of them are covered by company health benefits. According to the Congressional Budget Office, had there not been the $69 billion dollar subsidy to the big corporations who contributed over $22 million to President Bush and supporters of the Medicare bill in Congress, about 3.8 million Americans would have lost their retiree coverage.
It is unclear the effect this ruling will have on retirees who refuse to apply for Medicare coverage as participation is voluntary.
Opponents of the vote are expected to seek relief in federal court.
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"This ruling could create a potentially explosive political issue because it's already creating deep worry for many of the 12 million Medicare beneficiaries who receive such benefits from former employers."