General Motors announced Monday it will no longer provide health insurance coverage for more than 100,000 retirees and their dependents as of January 1, 2009. The move will save the beleaguered auto giant $3.3 billion per year. Large labor unions whose members work at GM had no comment on the announcement.
By way of replacement for its longstanding health coverage benefit, GM will kick in an extra $300 per month to retirees’ pension checks so they can buy their own insurance. Retirees will be allowed to enroll in Medicare beginning today, a month earlier than the federal program begins enrollment for everyone else. Many of Medicare’s prescription drug plans cost more than $300 per month, and drug benefits are just part of the insurance package GM retirees had enjoyed until now.
To help its retirees navigate Medicare’s complex array of plans and products, GM will mail information kits between now and early November.
“You worry about it a little bit, but I’m not losing sleep over it, when I do sleep,” joked Bud Allen during an interview with the Detroit Free Press. Allen is a GM retiree who suffers from insomnia. He and his wife enjoyed comprehensive health benefits for 43 years while he worked at GM, and for the first 17 years of his retirement.