On November 1st the Teachers’ Retirement Board (TRB) voted to obtain bids for an alternative health plan. A decision is scheduled after the new year.
The proposed plan will be a fully insured, Medicare Advantage (MA) plan. Some people call these plans Medicare HMO’s. All employees will be automatically enrolled in the new plan July 1st, 2018, unless they choose to re-enroll in their current program (Stirling Benefits).
The bid information suggests a $25 copayment for a doctor visit, $200 to go to the hospital and a network of preferred providers. Often, MA plans require a referral to see a specialist, have surgery, or obtain coordinated care.
With the current (Stirling) plan, almost all doctor visits and all lab tests and hospitalizations are 100% covered with no member costs and no required referrals. There are no networks with the current plan. Members can see any Medicare doctor or hospital in the country.
At the last TRB, it was reported that the State is underfunding the TRB health plan by around $50M over the current two year budget. It appears that the only way to maintain the current plan is to increase retiree payments for that coverage. However, to accomplish that, a lower value “base plan” must be offered that will maintain the statutory 1/3 cost to the retiree. The Stirling Plan then becomes an option that can be chosen, with the retiree paying more to make up what the State did not fund. To keep their current benefits after July 1st, 2018, Stirling Plan members may need to pay near the $180 per month they were paying back in 2012.
The MA plan will almost certainly be administered by a large, for-profit, insurance company; Anthem and Cigna are both expected to bid. Insurers make money for their shareholders when they pay out less in claims then they take in premiums. Under the current arrangement, Stirling Benefits does not earn more or less if a claim is paid or denied.
One thing you can do now: make it easy to re-enroll in the current plan.
Requiring the new carrier to prominently provide information about how to stay with your current plan – in all their mailings and advertising – will help retirees understand their choice. Ideally, retirees will be able to re-enroll via the internet, a touch tone phone system, via a smart phone or on paper. Communication requirements and re-enrollment options are the kind of details that will make a big difference about how easy it will be to stay with the current plan.
Make your voice heard!
The TRB has formed a subcommittee of Board members to approve the winning bidder and will have authority over what will be communicated and how to re-enroll. The full TRB Board will have final say, but is not scheduled to meet in December or January; the next scheduled Board meeting is February 14. This leaves many details to be worked out by the subcommittee, the administration and the consultant overseeing the bid. Writing to the subcommittee and the Board is an effective means of making your voice heard.
The easier it is to re-enroll, the more likely enough retirees will stay with their current Stirling Benefits plan and the more likely that plan will be around as an option for years to come.