Many higher education institutions today are struggling with the costs of their retiree health plans. The answer to controlling these costs may come in the form of a defined contribution retiree health plan for both current and future retirees. This article examines how such a plan can maximize availability of Medicare Part D prescription benefits; maximize tax- and cost-effectiveness; substantially reduce, and perhaps eventually eliminate, FAS 106 liability for unfunded retiree health benefits on institutions' balance sheets; provide incentives that make retirees more informed consumers of health care; facilitate early retirements; and more.