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Towers Watson Acquires Extend Health, Combining Consulting and Medicare Exchange
There may be a whole new way to get and use Medicare. And it’s not coming a moment too soon, with those 65 and older expected to grow to almost 20 percent of the population by 2030. A whopping 2.8 million Americans will turn 65 this year and become eligible for Medicare, according to the Center for Medicare and Medicaid Services.
In light of this, Towers Watson, a professional services company, has made an agreement to buy Extend Health Inc., a San Mateo-based Medicare exchange, for $435 million. The deal is expected to close within 60 days, subject to normal closing conditions, according to a story by Chris Rauber.
Rauber writes that Extend Health operates “the largest Medicare exchange in the nation and that the deal will combine specialized retiree ‘medical transition consulting’ with the same choice and cost advantages as buying Medicare plans through a private exchange.”
Medical transition consulting is what companies do for employees who are retiring and need to select how they will continue to receive benefits.
Towers Watson and Extend Health announced a strategic alliance in August, according to Rauber.
With all the change in the healthcare world, many employers today are finding that traditional medical programs for retirees will not work over the long haul. Towers Watson and Extend Health hope to capitalize on this by offering new options and strategies to employers.
Each year more than 3.5 million Baby Boomers turn 55, and come closer to retirement, and it is predicted that, by 2012, America's 50 and older population will reach 100 million. And according to the UN Population Division, one in five people are expected to be 65 or older by 2035. That’s a lot of people retiring! According to Towers Watsons Website, it helps companies improve their performance through people, risk and financial management. With this agreement, it will counsel companies on how to handle employees’ moves from full-time employment to retirement as regards to their health benefits, while Extend Health will offer its technology, said to “allow retirees to choose from thousands of post-retirement plans offered by 75 national and regional insurers,” Rauber writes, including Medicare managed care plans, also known as Medicare Advantage plans and supplemental offerings, according to Rob Wyse, an Extend Health spokesman.
According to Towers Watson research, which indicates that 54 percent of employers with more than 1,000 employees are "somewhat to very likely" to reconsider their current employer-sponsored Medicare strategy by 2015.
Edited by Brooke Neuman