Retiree health benefits have been in the headlines for much of 2006–and the bottom line has been grim.
Here are some examples:
–Large companies, such as General Motors Corp., Detroit, are spending so much on retiree health coverage that they either are losing money or are struggling to compete in a global economy that forces them to cut overhead to the bone.
–Many seniors had trouble getting vital medications and complained bitterly about expensive co-pays, as states transitioned their Medicaid population to the new Medicare Part D prescription drug plan. In addition, many retirees continue to drag their feet on signing up for Part D, reluctant to make choices about options they don't understand.
–Government agencies are increasingly under fire for generous retiree health benefits that soak up dollars and deplete budgets that should be providing services to the public.
The backdrop for these headlines isn't encouraging. Health care costs continue to rise at double-digit rates across the country. Baby boomers are beginning to leave the work force, skewing the population toward retirees. Diseases are becoming more complex to manage and costlier to treat.
At the same time, benefit agents, brokers and consultants are seeing an increasingly challenging and competitive market. The products and services they successfully have sold in the past are becoming price-sensitive commodities, with customers focused on cost rather than added value or differentiation.
Does the future hold more of the same–or can brokers look at the convergence of these issues and find an opportunity to turn the headlines and frustrations to their advantage?
Certainly the latter as brokers should position themselves as problem solvers rather than product pushers. By creating a health care benefit strategy that gets employers out from under their headaches, brokers can create a long-term relationship with their customers that will pay dividends well into the future.
What can you offer employers? A new approach.
