The University of Arkansas System is changing the health plan it offers its retired, Medicare-eligible faculty and staff Jan. 1, saying it is trying to avert what would have been a 26 percent premium increase for the current plan.
Members of the faculty and staff have until Nov. 29 to decide whether to choose a “one-time option” to enroll in the new plan, UnitedHealthcare Group Medicare Advantage, according to an Aug. 27 notice mailed to retirees.
The new plan will debut on the third anniversary of the date the nation’s baby boomers first began turning 65.
The notice said healthclaim costs had continued to increase significantly and that the plan’s actuary had recommended the 26 percent increase.
Unlike current employees, retirees pay 100 percent of their premiums, Ann Kemp, the UA System’s vice president for Administration. The UA System has simply provided retirees aninsurance option at a group rate, she said.
Under the new plan, annual premium savings for the UA System health plan’s four tiers of coverage would range from $766.80 for the retiree on the “Classic Plan” to $2,319.60 for a retiree and spouse on the “POS Plan,” which stands for point-of-service.
The new plan would introduce, for the first time, the requirement that retirees pay out-of-pocket expenses, such as co-pays and deductibles, according to the letter.
“However, for the majority of retirees, the premium savings will more than cover these additional out-of-pocket expenses,” according to the notice letter.
“Our actuaries tell us that 75 percent to 80 percent of our retirees will save money under this plan,” Kemp said.
There are 17,000 participants in the UA System campuses’ self-insured risk pool, and 1,100 are retirees, Kemp said.
Retirees’ claims cost have continually risen for at least the last five years, Kemp said. If the 26 percent increase had gone into effect, it would have come on the heels of a 10 percent increase for retirees on July 1, 2012, she said.
The move means the retirees will no longer be in the system’s risk pool. So the change protects not only the risk pool, but also the retirees since their premiums won’t rise in the coming year.
While the current plan is supplemental to Medicare, the new Medicare Advantage plan is not considered a supplement, Kemp said. That’s because the new plan, controlled by the Centers for Medicare and Medicaid Services, streamlines a two- or three-step process for patients and doctors to one step.
“There’s just one card for the patient rather than a Medicare card, a supplemental card and a drug card,” Kemp said. “We’ll have one card that applies to all, and one claim that gets processed,” rather than a two- or three-step claim.
The notice to employees also said that, in addition to in-network providers, the retirees “can see any provider who accepts Medicare and the plan even if that provider is not in the network.” Also, the plan member pays the sameco-pay or co-insurance regardless of whether the provider is in- or out-of-network.
In a question-and-answer section of the notice, it says that most retirees can continue seeing their current doctors.
That was not the case for Joan Watkins, who retired from the Fayetteville campus in 2001 after working there for two decades. She said her primary-care practitioner for the past 20 years does not accept Medicare Advantage plans.
Watkins, 67, said she doesn’t want to switch doctors because hers helps her coordinate “a number of health issues.” Though she’s not made a decision, she said she will likely find a new plan provider on her own.
Watkins said she and other retirees would have welcomed the opportunity to help the system research options regarding the insurance plan.
“I understand why it’s happening. It was just a surprise,” she said. “None of us should have been surprised; it would just have been better to have a little bit of involvement.”
Evan Bukey, a professor emeritus of history at UA-Fayetteville, said that while some of the retirees’ questions have been answered, uncertainties remain.
That includes whether the new Medicare plan will cover laboratory tests that a doctor’s office sends to an outside lab, he said, recalling questions other retirees posed during a recent presentation UA-Fayetteville hosted regarding the switch.
Other answers seem more clear-cut.
A year ago, Bukey said, his wife, Anita Bukey, contracted a serious skin infection while traveling in Italy. The system’s current plan covered the $200 medical bill, a benefit he said won’t continue.
“Medicare won’t pay a penny for any injury outside the United States,” Bukey said.
On the pro side, Bukey said he, his wife and some other retirees made some calls to area providers and concluded four out of five doctors would accept the new plan.
The Bukeys have found another plan similar to the system’s current plan, but haven’t yet made a final decision on whether to opt out of the new plan. He said they are waiting to see what finalized rates look like.
“Everybody had been very happy with the current plan,” Bukey said.
Northwest Arkansas, Pages 15 on 09/29/2013