Sears Retirees Lose Health Benefits

[Ming]

While this is not automotive-related, it is indicative of the direction many companies in America are taking --- is GM next, or will threat of UAW strikes keep them from making such cuts? - Ming

Sears retirees lose health benefits
By Lauren Coleman-Lochner
Of Bloomberg News
9/27/05



Sears Holdings Corp., the largest U.S. department-store chain, will cut medical coverage to retirees under 65 to counter rising health care costs.

About 6,750 retirees, or 15 percent of those enrolled in the company's retirement program, will pay the full cost of premiums starting on Jan. 1, spokesman Chris Brathwaite said Friday. Benefits will be restored for those former workers when they turn 65 provided they retired before Jan. 1, 2000.

Chairman Edward Lampert is cutting costs after engineering Kmart Holding Corp.'s purchase of Sears, Roebuck & Co. for $12.3 billion. Sears Holdings plans to reduce $300 million in expenses to compete against Wal-Mart Stores Inc. and Federated Department Stores Inc.

''Like most companies, Sears is struggling with the spiraling cost of health care,'' Sears said in a statement Thursday. Sears said medical costs for retirees accounted for about 17 percent of its operating income last year, while health spending for current workers and retirees consumed half of its domestic operating income.



''The new plan continues to be more generous than most,'' said Brathwaite, who said the company held focus groups and consulted with retirees before making the changes. He declined to provide specifics on premiums, the costs for retirees or the savings for the company.

Sears, based in Hoffman Estates, Ill., in April said it would end pension contributions and tuition reimbursements for most employees to align its policies with competitors such as Wal-Mart and Home Depot Inc.

''It could have been a lot worse,'' said Ron Olbrysh, chairman of the National Association of Retired Sears Employees, an independent Chicago-based group formed in 1997. The company will still allow retirees to enroll in its medical plans, one of the few retailers that offer such a choice, he said.

Sears Holdings has fired 850 workers at its headquarters in Illinois and at Kmart's former headquarters in Troy, Mich. It later said an additional 1,400 would be fired or relocated to headquarters or to a transactions processing center in Dallas.

Between 1999 and 2004, the average annual family health premium increased 73 percent to $9,950, according to the Employee Benefit Research Institute in Washington, D.C.

Aricle Source: http://www.mcall.com/business/local/...inesslocal-hed

[nadepalma]

Though they are in two completely different fields, I hope that the UAW and others pay attention.

[stewacide]

It's one thing for the United States to have a free-market healthcare system, but for Americans to then expect employers to provide everyone open-ended coverage is contradictory nonsensical. Either Americans accept that in a free market there's no free lunch and they'll have to pay for their own private insurance or per-service out-of-pocket, or they accept the limitations of a universal system. Clearly they can't have it both ways any longer...

Does anyone else find it ironic that the American model of employer-provided social services is closest to the USSR/China social model? Most other developed economies have realized that businesses are in the business of doing business, not providing social services for anyone they ever employed AND their relatives!!

[ponchoman49]

This health care bull is just getting out of hand. People had better pray they are in good health when they retire at 55-62 in the coming years or these companies will leave them out in the streets. It seems like nothing but doom and gloom news the past 3 years or so. The war on terror. Health car is slowly killing companies like GM. Hurricane season is whiping out cities and lives. The economy is still wavery. Gas prices are eating people alive not to mention absurd energy costs for heat in the Winter months. Everybody is having to cut costs and raise prices constantly in my town and in many others too. Every year I wonder what else I can cut back on to just be able to afford bills and gas. We really need a miracle at this point folks.

[stewacide]

Originally Posted by ponchoman49

This health care bull is just getting out of hand. People had better pray they are in good health when they retire at 55-62 in the coming years or these companies will leave them out in the streets. It seems like nothing but doom and gloom news the past 3 years or so. The war on terror. Health car is slowly killing companies like GM. Hurricane season is whiping out cities and lives. The economy is still wavery. Gas prices are eating people alive not to mention absurd energy costs for heat in the Winter months. Everybody is having to cut costs and raise prices constantly in my town and in many others too. Every year I wonder what else I can cut back on to just be able to afford bills and gas. We really need a miracle at this point folks.

Instead of bitching and moaning people need to recognize the "market signals" and adjust their lifestyle accordingly:

- Gas eating up a larger and larger chunk of your income? How about drive less / buy a more fuel-effecient car / walk / bike / take public transport? There's only so much cheap oil in the world, and no amount of complaining will change that fact.

- Areas of the country are being destroyed by the elements every few years? Maybe people shouldn't keep rebuilding in those areas! The government's continual paying out of natural disaster relief to the same areas is a subsidy to the people dumb enough to live and invest there. You can't change the weather, so adjust accordingly!

It's insane that Americans are moving more and more to the areas of the country least naturally able to carry that population. The storm-ravanged Southeast, the drought-stricken Southwest, etc. Why should the taxpayers of New York/Michigan/Oregon, etc. keep subsidizing other peoples desire to avoid the snow and cold?

- Natural gas and heating oil becoming more expensive? Maybe it's time for people to get over their irrational fear of nuclear power, etc, etc...

[Ming]

I see a direct link to escalating health care costs and the commercialization and glamorization of pricey prescription drugs through colorful advertising on TV and in magazines. It seems every commecial break on some channels you are treated to a new drug that you have to "ask your doctor" about.

Combining an all-you-can-eat health care buffet with the trendy drugs of choice, chosen by patients who see ads on TV and tell their doctors that they need them (instead of the other way around) is a recipe for disaster, IMO.

[CarShark]

Use your blinkin' dishwasher.

[Havasavana]

Originally Posted by ponchoman49

This health care bull is just getting out of hand. People had better pray they are in good health when they retire at 55-62 in the coming years or these companies will leave them out in the streets.

Prayer and crossing their fingers won't solve the problem. People have to stop gorging themselves on fattening food. And it wouldn't hurt to get away from the TV now and then. Go anywhere and look at the slobs waddling around. It's going to get much worse before it gets better. When these slobs develop diabetes and related ills, those that don't already have them, watch the medical bills soar. No company or society can treat people as fast as they can make themselves sick. Train wreck ahead.

[VivienM]

Originally Posted by Ming

I see a direct link to escalating health care costs and the commercialization and glamorization of pricey prescription drugs through colorful advertising on TV and in magazines. It seems every commecial break on some channels you are treated to a new drug that you have to "ask your doctor" about.

Combining an all-you-can-eat health care buffet with the trendy drugs of choice, chosen by patients who see ads on TV and tell their doctors that they need them (instead of the other way around) is a recipe for disaster, IMO.

But that's the American way!

Surely it would be socialistic to do what most (all?) other countries do and ban direct advertisement of prescription medicines...

[01cavalier]

It does seem healthcare is a trainwreck waiting to happen, nothing keeps a person healthier than eating good and being active. The costs are ridiculously high. I wont be surprised when even more companies start cutting off benefits for retirees, or at least making them handle even more of the burden. Whats scarier to me is it seems like socialized healthcare is inevitable! Then we get to have problems like Canada.

[VivienM]

Originally Posted by 01cavalier

Whats scarier to me is it seems like socialized healthcare is inevitable! Then we get to have problems like Canada.

With twice as much money per person being spent?

Current U.S. health-care-related per-person expenditures are twice Canadian per-person health care expenditures. (And that spending leaves 40 million people uninsured...)

If you simply reallocate that spending (aka raise the same amount of money through taxes and have government spent it), then surely you should be able to afford a nice "socialized" system, given that most people would say the Canadian system only needs something like a 20-25% funding increase to fix whatever problems (waiting times, mostly) there are.

[member12]

Originally Posted by stewacide

Why should the taxpayers of New York/Michigan/Oregon, etc. keep subsidizing other peoples desire to avoid the snow and cold?

...

Because for decades states like Louisiana, Texas, Florida, and Arizona have been doner states when it comes to allocating federal funds. States like Michigan and New York are enjoying the benifits of my taxdollers.

So federal funds that would have otherwise gone north could have gone into building a better levee around New Orleans, or a decent highway to get everyone out in time.

Natural gas gets taken out of my land to be burnt in the frozen north for heating because your coal is too dirty to burn anywhere but my backyard! How screwed up is that? I get cancer, while you keep warm in the winter off my gas and sell me this crap to burn. Or would you prefer we just shut down the port of New Orleans because it is prone to floods and hurricanes?

We send electricity, gas, and supplies up when you have a blizzard or a blackout because you are an American, and we are supposed to look out for each other.

Stop blaming this problem on those of us who live in an earthquake/hurricane/mudslide/drought/flood proned area. This problem does not care where we live. Health care is a big issue right now. GM will have to do something about it or go out of business. The UAW should expect something like this to happen to them, and, since they claim to be GM, they should look out for the company, too.

Face it, someday, we will have to pay out of pocket for a doctor's visit, or heaven forbid, something as simple as viagra. Get a grip, UAW.

My premiums come right out of my check, and when I needed foot surgery, I had to hire a lawyer to get the **************** insurance company to pay, so why can't I get free medical care covered by my company?- because my comany operates on such slim margins, that it would go under.....just like every UAW worker.

[cfch3399]

UAW demands aside, I do see a problem with taking away healthcare away from those who need it the most. And it's not like the aged can get jobs easily- employers don't seem to be fond of hiring anyone older than 35.
Someone should investigate just what accounts for the disproportionate and constant rise in health care costs. Some of it goes to marketing unfortunately, it's a disgrace that they change the laws to let drug manufacturers market directly to consumers. Money that could be spend on research or to reduce the cost goes to good-for-nothing bsers, I mean, marketers, actors, directors, etc. But what about the rest, where is all the money going?

[member12]

So if GM goes the Sears route...what happens if health care ever becomes affordable again?

[VivienM]

Originally Posted by member12

So if GM goes the Sears route...what happens if health care ever becomes affordable again?

Health care costs are very, very, very unlikely to go down... whether that's under the U.S. private system or in countries with more 'socialized' systems.

Basically, the only way to get health care costs lower would be to get back to the age distribution that you had 40 years ago. There are just too many senior citizens now for health costs to be low... and the U.S. isn't even the most pessimistic case. In some European countries, they're forecasting something like 20-25% of the population being over 65 in a few decades...