GM Driving Retiree Health Care Costs Higher

The move affects 164,000 salaried retirees, who will see average increases of $25 per month effective January 1, 2003.   The monthly increase could range from $9 to $51.   However, the 528,000 hourly retirees, or their surviving spouses, will not see an increase, as their benefits are protected by United Auto Workers national agreements.

Premiums will increase per plan depending on where the health care provider ranks on GM’s quality and cost standards.  

Ranking high on GM’s standards were Health Alliance Plan and HealthPlus.   GM would not say who rated low, but according to the Detroit Free Press, “one 1987 retiree, who asked not to be named, said his Blue Cross Blue Shield plan premium was jumping from $40 a month to $80.   Two years ago, it was $20.   Before that he paid nothing”.

GM has been developing a health care provider standard with the Leapfrog Group, a Washington DC-based employers group.  The standards try to encourage employees to use those providers that provide the highest levels of service and care at the best price.

Rising health care cost, up 12.7% in the past year, have caused many employers to begin charging more for health care benefits.   A recent survey of 150 southeaset Michigan employers found 87.0% were either changing plans or increasing cost, according to the consulting firm American Society of Employers.

Ford recently began charging its retirees a monthly premium for the first time.

GM spent $4.2 billion last year on health care benefits for 1.2 million retirees, employees and dependents.   $2.8 billion of that was spent on retirees and their surviving spouses.