Product innovation: Retiree health

The challenge

Older, longer-lived retirees. Increasingly sophisticated and expensive medical treatments. Relentless global competition. All reasons why many employers view retiree healthcare as a financial burden they can ill afford. Companies want to give their retirees access to affordable health coverage, but they want them to set aside their own money - helped along by appropriate tax incentives - to pay for most or all of their own health insurance. Employers who aren't eliminating or curtailing retiree health coverage are looking for other ways to limit their financial liability for retiree healthcare.

Employers’ desire to limit their responsibility for retiree healthcare has created an opportunity for you to turn retirees into well-served, profitable new members. To attract this growing population, you need to proactively develop innovative products that meet the medical needs of retirees and address their financial constraints and those of their former employers. Defined contribution plans let employers contribute a set amount into each vested employee's health savings account (HSA) to pre-fund retiree medical care. These plans can be coupled with Medicare Advantage plans to further reduce employer expenditures. Flex plans let employers uncouple their benefits so retirees can purchase only the coverage components they need. Specialty illness policies let retirees purchase coverage to lessen the financial impact of specific conditions such as cancer and cardiovascular disease.

For your plans to be profitable, you need to correctly assess risks to price these products appropriately. And you must devise effective marketing strategies.

How we can help you

You can design and market health plans that are valuable to a growing population of current and future retirees. PwC has real-world experience helping payers go to market with innovative retiree health products. We can help you develop long-term strategies to devise benefit plans that address current and future retiree health issues.

You need to price your retiree plans so they're valuable to members and profitable to your organization. We can help you develop and price plan designs to reduce or control future liabilities.

Common services include:

• Selecting best-in-class vendors and business collaborators
• Developing marketing messages and campaigns
• Developing communication and change-management programs
• Developing and pricing retiree health plan