R.I.’s Medicare cost-saving move worries retirees
By Katherine Gregg, The Providence Journal, R.I. | |
McClatchy-Tribune Information Services |
That included a guarantee that the state would pay anywhere from half to all of their health-insurance costs, depending on how many years they had worked for the state.
For Drapeau, 76 years old and retired, that means the state currently pays all but
But now Drapeau, of
"The amount they are paying is less.
The amount I will be paying is more ...
and it is going to be a hassle getting the money," Drapeau fretted in a telephone interview Sunday in which she echoed the concerns that many state retirees have voiced to The Journal in recent weeks.
Their worries were prompted by the
Licht, sent to the 8,200
That changes
"Pursuant to recently passed legislation," Licht's letter said, the state will provide retirees with many "more plan choices from multiple vendors" in a newly created "Medicare Exchange" that will be administered by Tower Watson's OneExchange.
The words have stoked fear and confusion among retirees convinced the state is not only backing away from the health-care-for-life promises they thought they had when they retired, but also "dumping us into Obamacare." On Tuesday, the state and its new retiree "Medicare Exchange" administrator will hold the first in a series of meetings to try to put the retirees' concerns to rest, answer their questions, dispel the Obamacare myth and help them choose from among the many new choices.
The briefings start Tuesday on the
Retirees can also call a benefits counselor at (844) 448-7298.
How and why did this happen? Looking to save taxpayer dollars, state lawmakers in the annual budget bill called for the creation of a "Retiree Medical Exchange" in 2013.
The stated goal: "to offer greater choices to retirees and to lower the cost for the state and any retiree co-sharing through more competitive pricing," according to a House Fiscal Staff advisory.
What is a
"After a solicitation process, the state awarded a three-year contract with two one-year renewal options to OneExchange to administer the exchange." Estimated cost to the state:
Among the assumptions: The plans available from the new
Annual budget savings will exceed
Retirees required to pay a portion of the premiums will benefit from the lower prices.
The state set-aside for retiree health benefits has already dropped as a result, from an actuarially determined rate of 7.38 percent of payroll to 7.07 percent in the budget year that ended on
It dropped to 6.75 percent in the current year, according to Licht policy director
The state booked an estimated
State retirees age 65 and up can currently choose one of two United plans.
One costs
The other is a Medicare HMO plan costing
Asked about the new choices, Rogers said they vary for each person depending on age, zip code and selection.
"Working through a private exchange does involve a change of process for retirees -- which can be somewhat daunting to people who have been used to the same process for many years," Rogers acknowledged.
"But that change also offers a greater degree of flexibility in how they spend their subsidy, which can reduce their overall medical costs," she said.
Here is how it will work, according to Rogers: For those retirees eligible for a subsidy, the state will contribute money to a health reimbursement account (HRA), which retirees will use to reimburse themselves for medical expenses.
"Retirees pay their medical premiums out-of-pocket and then request reimbursement from their HRA.
This is an extra step," she acknowledged, for retirees who previously had their portion of the premiums deducted from their pension check.
But they can set up automated payment of their premiums from their bank accounts -- and automated deposit of their reimbursement checks into those same accounts.
And retirees who select plans that cost less than the subsidy to which they are entitled, she said, can use the balance to pay out-of-pocket medical costs.
As to how much goes into each employee's HRA, the summaries say, "the amount ...will be based on the lowest cost supplemental plan filed with
___
(c)2014 The Providence Journal (Providence, R.I.)
Visit The Providence Journal (Providence, R.I.) at www.projo.com
Distributed by MCT Information Services
Wordcount: | 958 |
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News