America’s largest companies expect the federal government to pay them about $4 billion over the next four years to help keep their retiree health plans alive at a time when such benefits are increasingly on the chopping block, according to a new study by Credit Suisse First Boston. The money is due to start flowing to employers this month as part of Medicare’s new prescription drug benefit. When Congress authorized the Medicare drug benefit, it also agreed to start subsidizing the drug component of employers’ retiree health plans, to keep them from shifting their retirees into the government program. The goal is to save the government money, even after the subsidies, while giving the retirees a better deal than they might get if they were pushed into Medicare. Among the nation’s 500 largest companies, 331 offer retiree health plans. With the program just starting its first year, it is not yet clear whether the subsidy will achieve its goals. For one thing, there are about 36 million people 65 and older in this country who are eligible for Medicare, but only about 7 million retirees currently covered by employer-sponsored health plans. Still, the Credit Suisse study, […]

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