Retiree medical care expenditures in the United States are growing at a rapid rate, while and the retired portion of the population is increasing. This puts pressure on government and employer programs providing retiree health care coverage. Retirees also face increasing challenges in gaining access to affordable coverage, particularly before eligibility for Medicare. In this chapter we assess prospects for US retiree health coverage and the challenges, risks, and roles of employers, Medicare, and retirees in providing and financing it. We discuss both traditional approaches to retiree health benefits, where the employer assumes most risk, and new defined contribution approaches, where significant risk is shifted to the retiree. We also review government benefits for retirees including new Medicare prescription drug benefits. We model future retiree health care costs and opportunities to save before retiring, highlighting public policy obstacles and issues for employer-provided retiree health benefit
