Medicare fee irks state’s retirees [Times Union, Albany, N.Y.]

Sept. 30--ALBANY -- A group representing retired state workers is crying foul because the Cuomo administration doesn't plan to reimburse high-income retirees for a new surcharge on drug coverage that is part of the Affordable Care Act.

"They claim the legal wording allows them to avoid it," Alan Dorn, executive director of the Retired Public Employees Association, said of the change, which relates to Medicare Part D, or drug coverage insurance.

While private-sector retirees age 65 and up typically must pay their own Medicare premiums, state workers receive taxpayer-funded reimbursement for these costs.

That's still the case for most Medicare premiums. But starting in January, Medicare-eligible state retirees began getting their drug coverage through Part D rather than the NYSHIP, the New York State Health Insurance Program, which covers current employees and those who don't yet receive Medicare.

That was done to save money for the state.

But in a move that retirees say came as a surprise, they recently learned that the state won't be reimbursing those who have to pay the new Income Related Monthly Adjustment Amount charges for Part D.

This means-tested charge applies to those with incomes above $85,000 as a single income-tax filer or $170,000 as a married couple.

The cost can range from $144 to more than $829 annually, depending on income.

It's not yet clear how many retired state workers on Medicare will have to pay these Part D charges.

That's because someone could have a pension below the $85,000 and $170,000 thresholds and still earn money from another job or from investments.

The Empire Center, which tracks and analyzes state spending, last year calculated that of all of the state's main pension fund recipients, those with 35 or more years qualified for an average pension of $55,858 as of 2011.

Civil service officials noted that there will be no additional costs for those below the IRMAA thresholds.

They also noted that the state has no authority to reimburse the new IRMAA charges. That would have to come from the Legislature and governor.

Still, Dorn said the change is unfair because there was an implicit deal that retirees wouldn't have to pay more when they shifted their coverage to Medicare about 10 years ago.

"We were made promises, and they moved us into Medicare saying it will save the state money and it won't hurt us," he said.

The retirees association is pursuing a lawsuit in state court over an increase in the share of health premiums that was imposed on both current and retired employees in 2011.

Dorn didn't rule out possible legal action on the Part D development.

rkarlin@timesunion.com, 518-454-5758

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