Friday, October 24, 2008

Pfizer Hits Ehrlich with $5216 to $8357 in Retiree Health Benefit Costs!

For a real life demonstration of how inadequate McCain's health plan is, even for well-off pharmaceutical company retirees, I offer the following from Bob Ehrlich who wrote in his eNewsletter for DTC Executives (find his entire article over at DTC Perspectives Blog):

"I am considered a Pfizer retiree. I worked there for about three days after their takeover of Warner-Lambert in 2000. I am covered for health insurance by the Pfizer retiree plan. When I received the retiree newsletter last week I was rather shocked to see that insurance costs will rise dramatically starting in 2009. Apparently Pfizer and many other corporations have capped their contributions which reached a peak in 2008. So all retirees are going to carry the up charges from now on.

"Pfizer says our costs will be $5216 in 2009, $8357 in 2010 and $11,808 in 2011. Sounds like a bubble to me. The company says these rates are still less than if we went out on our own to buy health insurance. I do not like paying these rates but I can afford it. What about the majority of their retirees who cannot afford such rising costs? I imagine there are millions of retirees who face this same dilemma from thousand of corporations."
If McCain were elected president and was able to implement his $5,000 tax credit for buying health insurance in the "open" and de-regulated insurance market, Erhlich would immediately lose $216 and up to $6,1808 in 3 years. That's considering just the cost of subsidized benefit. He would also be likely to pay taxes on the portion of the benefit paid by Pfizer.

What would Erhlich have to pay for health insurance if it were not subsidized by Pfizer? That is, what would he pay in the "open" market? If he is going to pay $11,808 for his share of a subsidized plan, I got to imagine the total bill for his plan is at least 2X that! Yikes! Could he afford that in an "open" market? What group would he be able to join that can offer a better deal than the thousands of Pfizer retirees?

Maybe this is why only 31% of Pharmaceutical employees who have taken my "McCain vs. Obama: Who's Better for Pharma" survey say they will vote for McCain versus 54% who say they will vote for Obama!

2 comments:

Kathleen said...

We just found out that my Pfizer Retiree Medical Plus is going to be 250% more in 2009. Pfizer can make United HealthCare do better by all of us. Our son is in college and we'll be stuck paying all of those increases you listed. Happy Halloween! All 3 of us voted for Obama, so we have some hope that something will be done 'right'!

Paul St. Amant said...

Now that Mr. Obama has been elected, have you seen or heard about any reform, yet? I'm eagerly awaiting news--good news I hope.