Employers have been reducing or eliminating retiree health
benefits in order to cut back on expenses, even though coverage rates
have remained primarily the same. However, co-pays, deductibles, and
insurance premiums have been increasing at a faster pace than inflation.
Retirees purchasing alternative coverage will find that they have less
comprehensive coverage and pay more for it than they would through an
employer. The trend of cutting retiree benefits may not stop if the
economy continues to worsen. Retirees are older and tend to be in
poorer health than other employees, which causes individually purchased
insurance to be higher.