The effect on retirees of losing retirement and health insurance benefits

The recent economic downturn has led to instability in the private health insurance industry. Although loss of medical benefits is assumed to have a negative effect on health, documentation is lacking. LTV Corporation (Ling-Temco-Vought) filed for bankruptcy and interrupted medical insurance for its retirees for six months.

Using a structured interview format, we surveyed community-living LTV retirees whose medical insurance had been interrupted. We sought to predict health status using a variety of measures.

The vast majority of retirees were generally unaffected by the loss of medical benefits. Of the 191 LTV retirees from Youngstown, Ohio, who were interviewed shortly after health benefit loss, 13.8% reported longer-term health effects (continued decline in subjective health status), whereas 8.5% had short-term effects (decline followed by return to good or excellent health status). Although 10.5% of workers experienced serious health problems during the crisis, only one worker was unable to pay for health care as a result of the benefits loss. A discriminant analysis yielded excellent results in predicting longer-term deteriorating health status.

Implications for community-oriented primary care service models are discussed, as well as the utility of demographic targeting for retirees losing health benefits.