To illustrate the critical importance of efficient health care purchasing to retirement security, Alight, Inc. (NYSE ALIT), a leading cloud-based human capital and technology services provider, studied the projected financial impact throughout retirement associated with purchasing various levels of individual private health insurance to supplement Medicare. Alight’s analysis shows that health care purchasing calibrated to the individual retiree health care and lifestyle need can dramatically reduce health care expenditures in retirement by up to 50%, translating into tens of thousands of dollars in savings. The study demonstrates that informed, personalized health care purchasing in retirement is just as important as accumulating meaningful assets to support a comfortable retirement.
Challenges of employer-sponsored group insurance
Alight’s analysis is focused on leveraging individual Medicare health insurance to supplement original Medicare and does not explicitly study employer-sponsored group insurance.
Alight has found that the individual marketplace can outperform single-risk pool, one-size-fits-all group coverage with a consistent 20%-50% purchasing efficiency opportunity, when the marketplace of individual Medigap/Medicare Supplements, Medicare Advantage and Medicare Part D coverages are considered. This includes both group-based Medicare Supplement plans with prescription drug coverage as well as national open access Medicare Advantage Part D Plan PPOs, neither of which can drive the purchasing efficiency found in the individual marketplace for various reasons. Therefore, a retirement asset analysis focused on employer-sponsored group insurance, as opposed to the individual marketplace, would likely indicate that even greater amounts of retirement assets are required to support retiree needs, simply due to the observed financial limitations of group purchasing.
Alight can help retirees effectively navigate the marketplace
“The complexity of the health care insurance marketplace makes it challenging for a retiree to effectively evaluate their options and make informed decisions,” said Elizabeth Kochneff, director and retiree medical actuary of Alight’s Retiree Health Solutions team “The variety of options can make it very easy for a retiree to make an inefficient, generalized choice which consumes significant levels of retirement assets over time. Alight can help retirees effectively navigate the marketplace and make more informed choices by helping them understand the coverage levels of options across carriers, their current health needs, risk tolerance and likely future needs.”
The Alight Retiree Health Solutions (ARHS) Private Medicare Exchange provides personalized decision support, with ongoing advocacy designed to help Medicare-eligible retirees avoid pitfalls which typically undermine efficient health care purchasing. Alight’s retiree-centric customer service approach helps retirees identify, evaluate and enroll in individual health care coverage calibrated to their specific needs, eliminating wasteful spending and protecting retirement assets. Alight helps retirees select the optimal coverage based on their facts and circumstances at that time and provides a trusted advocate to support them throughout their retirement and as their needs evolve.
“As part of a broader retirement wellbeing strategy, employers need to provide their employees and retirees access to tools to support informed, personalized health care decisions,” said Andre Walton, EVP of Alight Retiree Health Solutions “Alight’s analysis shows the critical role effective health plan selection plays in supporting fundamental retirement security objectives.”
You can view Alight’s complete analysis here. To discuss how offering access to the Individual Marketplace can help you, contact elizabeth.kochneff@alight.com.