Medicare Individual Market Cost Control Analysis

This technical report presents an analysis of the Medicare Individual Market and its impact on retiree health care costs. It outlines how employers transitioning from Group plans to the Individual Market can achieve significant savings while enhancing benefits for retirees. The report details financial feasibility studies conducted by Alight actuaries since 2018, showing that employers can reduce retiree health care costs by approximately 40% when utilizing the Individual Market. It also discusses the trends in average annual costs per retiree, noting that costs have increased at a slower rate than general inflation. The report highlights the effectiveness of the Individual Market in managing costs through competition and diverse plan offerings, which allow retirees to make personalized purchasing decisions. Additionally, it addresses upcoming legal requirements, such as the Inflation Reduction Act, which are expected to further influence costs and benefits in the Individual Market. The findings are supported by data from 2019 to 2024, providing a comprehensive view of the current landscape.