The Supreme Court on Monday gave employers a green light to reduce health benefits for millions of retirees who turn 65 and become eligible for Medicare.

Companies and Labor Unions were both against AARP who wanted the plans to stay the same. Fear that Employers would completely drop all retirement plans was the main reason.

In a study by the AARP of retired persons age 55 to 64 health insurance coverage from a former employer dropped from 50% covered in 2004 to only 13% covered in 2005.

AARP, said it was “deeply disappointed” by the court’s rejection of its appeal and predicted the decision will encourage more cutbacks by employers. The court’s action “clears the way for employers to discriminate by reducing or terminating benefits for older retirees”.