Prometheus 6

Health Coverage Dispute Pits Older Retirees Against Younger

By MILT FREUDENHEIM

It is a health care issue that pits older retirees against younger ones, and both sides are asking Congress for help.

Some employers and unions want Congress to override a recent federal court ruling that would force employers who offer health insurance to early retirees to give comparable coverage to retirees who are 65 or older and eligible for Medicare.

Health coverage for younger retirees, as a bridge to Medicare, can be an inducement to workers to take early retirement, so that younger, lower-paid people could replace them. But groups taking the side of retirees older than 65 - notably AARP, the influential advocacy group - say that if superior benefits for early retirees is a form of age discrimination. And federal courts have agreed, citing the Age Discrimination in Employment Act.

Unfortunately for both sides, the issue arises at a time when climbing health costs have meant that only about one in seven private employers still covers retirees of any age. And the number providing coverage continues to shrink - even among larger employers who are slightly more likely to cover retirees, according to a report published last month by the Employee Benefit Research Institute, a nonprofit study center in Washington.

Spokesmen for the United States Chamber of Commerce and the National Education Association union who testified Thursday at a hearing of the House Subcommittee on Employer-Employee Relations predicted that the recent court ruling would accelerate the decline in retiree benefits.