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Don’t Make Me Say I Told You So 15

“Companies reorganizing under Chapter 11 protection argue they
can simply no longer afford the costs to pay for retirees’ healthcare

and pensions. They almost always prevail in terminating these
contracts,” The Wall Street Journal reported. 3

These legal battles highlight potential problems for almost
every retiree in the U.S. who receives healthcare benefits from

Companies that reorganize under Chapter 11 protection
a corporation. The law does not require employers to pay for
have argued in the courts, almost always successfully,
health benefits for employees or retirees. Companies are, in
that they simply can no longer afford the costs of retirees'
most cases, free to change or drop coverage previously offered.
healthcare and pensions.
Over the last decade, many companies have cut or discontinued

retiree healthcare benefits because of skyrocketing costs.

Medicare will help retirees whose health benefits are being
PLEASE INSERT CHART #138 - MEDICAL
slashed, but it’s not going to be painless for retirees. For
BANKRUPTCIES. IT'S IN OUR SHARED DROPBOX
Americans 65 and over, Medicare will cover the costs of medical
FOLDER
care that isn’t covered by company health plans. With Medicare,
however, the retiree must share costs for prescription drugs,

doctor visits, and hospital stays, which can sometimes run into

thousands of dollars in annual out-of-pocket costs.

So in addition to pension plans being in decline and existing

pension payments being cut, retirees must now deal with the
specter of t loss of health and medical benefits they thought

they had earned.

the

Chapter 1: The New Retirement