“I never understood, if one has coverage why do they require the 65 yr old crowd to drop it and take Medicare?”
First, “Medicare has special rules that apply to beneficiaries who have group health plan coverage through their own or their spouse’s current employment. Group health plans of employers with 20 or more employees must offer these people the same health insurance benefits under the same conditions that younger workers and spouses receive.” http://www.medicare.gov/choices/employer.asp
But for employers not bound by this rule, the rationale is because 65-year olds cost much more than the average employee. Thus, it’s cheaper to rely on tax-financed health care as the primary payer and just use the employer coverage as supplemental coverage to fill in gaps in Medicare (e.g., to cover deductibles and cost-sharing or services not covered by Medicare).
If a company has more than 20 employees, they must continue offering their employee (or retiree) the same plan at 65+?
Or just supplemental to Medicare and Medicare is then primary?