Retiree Health Benefits: Going, Going, Nearly Gone?

By Tricia Neuman and Anthony Damico · KFF · 2024 · CP321-116-25

Study guide: Exam CP-321

A KFF data note, published April 12, 2024, that analyzes five national surveys to assess trends in retiree health coverage among people ages 65 and older. The surveys produce somewhat different estimates but together show that the share of Medicare-age adults with employer- or union-sponsored retiree health coverage has been shrinking and appears to be on the way to extinction.

On the syllabus

• Exam CP-321 — Outcomes 6d-6g; study note CP321-116-25, Retiree Health Benefits: Going, Going, Nearly Gone?

Trends in Retiree Health Coverage

• Employer- and union-sponsored retiree health benefits have been an important source of supplemental coverage for people on Medicare, filling in some or all of Medicare's deductibles and cost-sharing and offering benefits such as dental and vision and a cap on out-of-pocket spending.
• KFF's 2023 employer survey shows the share of large employers (200 or more employees) offering health benefits to retirees down from 29% in 2020 to 21% in 2023, and from 66% in 1988; about 5 million Medicare-age retirees get their coverage from a group Medicare Advantage plan.
• Estimates of the share of people ages 65 and older with retiree health benefits in 2022 range from 21% (American Community Survey) to 12% (National Health Interview Survey).
• Reasons given for the decline: rising health care costs forcing tradeoffs between active workers and retirees, declining union membership, and improved Medicare benefits (the prescription drug benefit added in 2006 and extra benefits in Medicare Advantage).
• The erosion heightens the importance of Medicare coverage decisions for retiring boomers and their spouses.

Methods

• The note is based on an analysis of five national surveys; the Current Population Survey analysis cannot be trended to years before 2013, and the Medicare Current Beneficiary Survey is excluded because of methodological changes.
• Differences reported denote statistical significance at the 5% level relative to 2022, except for SIPP, HRS and the pre-redesigned CPS segment.

Sources

• Retiree Health Benefits: Going, Going, Nearly Gone? (Tricia Neuman and Anthony Damico, KFF, April 12, 2024) — the document: title, authors, date, the text and the Methods section (web page, sha256 e080468ca43fcf19c8ab5f0aa251310fcc95e72e89c760ee72103661ab307d27); the Society of Actuaries' own copy of study note CP321-116-25 was not seen, and this KFF article was identified by its identical title; the body before Methods is untitled in the original and its heading here names what it holds
• CP 321 Introductory Study Note, November 2026/July 2027 (SOA) — the study-note code CP321-116-25 and its title
• CP 321 Syllabus, Nov 2026/Jul 2027 (SOA) — the citation and the learning outcomes