Does IBM's Health Insurance Decision Offer Hints of What is to Come?

By Brittany Walters-Bearden
TMCnet Contributor

As state health insurance exchanges roll out their call centers, including MNsure, Healthplanfinder, Covered California, and Connect for Health Colorado, with more to come when people are actually able to start making purchases on October 1, 110,000 IBM (News - Alert) retirees are joining the rosters of those seeking insurance. Now, they will receive a payment with which they can purchase coverage through one of the exchanges.

While IBM may not be hurting for money, its decision to cease to provide retirees with healthcare benefits is cited as a cost-saving measure. IBM notified its employees that the healthcare offered is “no longer sustainable”—under its current plan, costs for retirees eligible for Medicare are projected to triple by 2020.

According to The Wall Street Journal, IBM’s decision is a significant one, providing a glimpse into what the future may hold for retirees and employees alike; “IBM’s shift is an indication that health-insurance marketplaces, similar to the public exchanges proposed under President Barack Obama’s health-care overhaul, will play a bigger role as companies move coverage down the path taken by many pensions, paying employees and retirees a fixed sum to manage their own care.”

According to Alex Nussbaum, of Bloomberg (News - Alert), GE will be doing the same. This trend, he says, could shift more cost to taxpayers, citing a study conducted by Towers Watson & Co. last month, which revealed that over the next two years approximately 44 percent of companies plan to stop administering health plans for retirees. With so many people relying on the exchanges, it is hoped that the plan will be rolled out as efficiently as it has been portrayed. Whether or not their insurance will be comparable to that which they had received through their former employer is, at this time, unclear.

Many retirees who previously relied on their former employer will, no doubt, have questions. With the exchanges opening their doors on October 1, calls are sure to start flowing in.