Health care costs hurt retiree insurance

No one wants to see their health insurance eroded. That could happen to some people under a new federal rule freeing employers to reduce the coverage they provide for retirees once they qualify for Medicare at age 65.

But the new rule is a practical response to the reality that the system of employer-based health insurance is slowly crumbling under the weight of rising costs. The Equal Employment Opportunity Commission attempted to help slow that decline with its clear statement that reducing or eliminating coverage for retirees when they become eligible for Medicare doesn't violate the Age Discrimination in Employment Act.

Of course, the real problem is the rapid rise in the cost of medical care. Unless the nation finds some way to arrest runaway costs, coverage for retirees and employees alike will continue to deteriorate.

AARP, an advocate for older Americans, denounced the rule as discriminatory. The association had sued to block its implementation, challenging the EEOC's authority to blow a hole in the anti-discrimination law it is charged with enforcing. But an appeals court ruled that the EEOC's action was reasonable and necessary, a decision AARP has asked the Supreme Court to review.

One result of the new rule is that employers will be able to shift more of the cost of insurance to individual retirees over 65. Their dependents and spouses who are too young to qualify for Medicare could find themselves without medical coverage as employers cut back. Not all of them will find viable alternatives in the private market, where policies are expensive for all and difficult to procure for people with pre-existing medical conditions.

But employers are not required by law to provide any health benefits. If those who voluntarily cover retirees are forced to provide the same plan, or plans of equal value, for all of their retired workers, in too many instances the result could be the deterioration - or even the elimination of coverage - for all.

Unless and until the nation finds some way to rein in soaring medical costs, this death by a thousand cuts is bound to continue.