Will Retirees Face Medical Debt As Companies Cut Benefits?

old people enjoying the music at Xihu (Hangzhou) According to an article in the Star-Telegram, American Airlines is dropping health insurance benefits for it’s non-union retirees over 65 year old as the company battles to avoid bankruptcy.

The article said:

“American officials said Tuesday that letters went out to 5,500 retirees last week. The insurance plan will end Dec. 31, leaving retirees with the option of paying the full cost of their own coverage to supplement Medicare…The changes do not affect American’s union employees, including pilots, flight attendants and mechanics. But American has made a similar proposal in contract talks with the airline’s three unions.”

American Airlines has been locked in an intense battle with three of its unions as it tries to free itself from health insurance obligations to union retirees to avoid bankruptcy.  But the question many analysts have is how many more companies will choose to abandon their healthcare obligations to retirees?  Already, millions of senior citizens are drowning in medical debt as healthcare costs rise and many insurers charge astronomical rates for anyone who has pre-existing conditions.

Even with insurance and Medicare, some seniors are saddled with unmanageable medical debt because they need expensive procedures, medication or health regimens that are not covered or only partially covered by their health insurance.  Medical debt is one of the leading causes of seniors filing bankruptcy and if companies are allowed to drop retiree health insurance coverage, the numbers of “medical” bankruptcies are going to rise.  Currently, only bankruptcy can relieve seniors from the burden of paying medical debt. Filing Chapter 7 bankruptcy will allow many seniors to discharge their medical debt and get a fresh financial start.

By | 2017-12-13T00:59:25+00:00 September 25th, 2009|Medical Bills|Comments Off on Will Retirees Face Medical Debt As Companies Cut Benefits?