After its $8.6 billion loss in 2005, General Motors Corp. has announced it will rein in the health care costs it pays for its 1.1 million employees and retirees by capping contributions to salaried retirees’ Medicare premiums and supplemental insurance at 2006 levels. According in an article in the Detroit Free Press, the cutbacks to retiree health benefits will save the automaker a total of $4.8 billion in healthcare costs and an additional $900 million in annual administrative expenses. Next year, the company may make other changes to retiree health benefits, such as increasing deductibles and co-pays.
Nissan will also end its practice of providing supplemental health insurance to retirees, reports the Los Angeles Times. Starting in January, manufacturing workers who turn 65 will receive $5,000 each year (adjusted by 3% annually) to buy their own supplemental insurance. And new employees who do not do manufacturing jobs will receive no health coverage after age 65. Toyota and Honda say they do not expect to limit health benefits for retirees.
