By Meghana Keshavan Detroit Free Press July 16, 2008
After years of getting generous coverage, retirees from salaried jobs at General Motors Corp. reacted angrily Tuesday to the announcement that GM was ending their health benefits.
"I'm disappointed in the lifetime promise GM made to us," said John Fleming, 67, of Rochester Hills, a retired information system auditor. "We've been wiped off the books completely."
Fleming was among the shell-shocked GM retirees wondering about what they'd do next for health care, following the surprise announcement that is part of GM's latest cost-cutting plan.
Effective Jan. 1, GM will end health benefits for 97,400 salaried retirees 65 or older, their spouses and dependents. Retirees will receive an extra $300 a month in their pension checks that could be used to buy health care.
Salaried Chrysler LLC and Ford Motor Corp. retirees had to make similar choices in the past two years, after receiving years of coverage for medical, dental, vision, prescription drug and some rehabilitation services with modest co-pays.
Although half of American employers still offer health benefits to retirees, the trend is to drop retirement health plans for newer workers or freeze coverage for current retirees to save money, according to the Kaiser Family Foundation, a nonprofit health research organization.
Now GM retirees also must navigate the confusing world of Medicare -- a health insurance plan some find so bewildering that many settle for costlier plans without doing the research to find cheaper, more comprehensive ones.
GM has hired ExtendHealth, a San Francisco benefits management company, to help retirees find new health coverage, said GM spokeswoman Michelle Bunker.
Last year, ExtendHealth helped 40,000 Ford salaried retirees make a similar transition. GM will send information packages to those affected in September and will set up a call-in telephone service prior to Oct. 15, the first day of enrollment for Medicare.
The package will be followed by other mailings and seminars to guide retirees through their Medicare options. "We want to make this transition as easy as possible for everyone," Bunker said.
GM paid $3.3 billion last year for health care for its 442,400 retirees, a figure that includes hourly workers not affected by the benefit changes announced Tuesday, Bunker said. Hourly retirees' health care moves off GM's books to UAW oversight in 2010.
With a new 2008 Chevrolet HHR in their driveway, Aldona and John Tessmar of Canton were furious with the news.
"We gave them the best years of our lives, and we're devastated," said Aldona Tessmar, 74, who was a GM accounting staffer for 27 years.
"They want us to retire and then drop dead," said her husband, John Tessmar, 72, a former security supervisor who worked 28 years for GM.
The Tessmars worry about what coverage they will be able to find, given their health problems. He just finished cancer treatment. They both have macular degeneration, a potentially blinding but common eye problem in elderly people. He also has an ulcer.
"The problem is, the people who are over 65 have medical problems," John Tessmar said. "A lot of insurance companies don't want to take us on because we're going to cost them some money."
He said he wants to kick himself for buying the GM car.
"All the current employees, retirees and their families are suffering for the wrong decisions made for many years by the top executives," he said.
The couple still haven't adjusted to higher co-pays they began to pay in 2005 and pension benefits frozen for 17 years, John Tessmar said.
"The bottom line for these people is the dollar," he said. "I wonder if some of their grandparents are being affected just like us. This is a knife stab in the back."
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