Retiree Health Care in the American States

 In

This report examines how state administrators perceive the importance of retiree health care benefits to central human resources (HR) goals — namely, recruitment, retention, and retirement — how the states structure retiree health care programs, and which cost sharing and cost shedding measures have been adopted and/or are being considered. Key findings include:

  • State administrators see retiree health care benefits as central to their recruitment, retention, and retirement timing goals.
  • Most states intend to keep financing retiree health care on a pay-as-you-go basis.
  • On the cost side, 17 states expect to introduce a plan to limit the subsidy for future retirees; three states say it is likely they will terminate subsidies for current retirees. A large majority of states have introduced disease management programs, have precertification procedures in place for inpatient hospitalizations, and conduct claims payer audits. And 16 states say they are likely to increase the years of service required for vesting in retiree health care.

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