Last month, I provided a summary of the RESDC Board goals for the coming year. I am pleased to report that shortly after you received that newsletter, a number of Board members were busy with activities to advocate on behalf of retirees and to ensure timely and accurate communications.
SDCERA’s Health Benefits Committee met in early February, a few months earlier than usual, to share the results of last fall’s open enrollment efforts and to obtain an update on the Patient Protection and Affordable Care Act (PPACA) from their AON Hewitt consultants. The following information from the meeting is provided to keep retirees apprised of ongoing discussions about retiree health care and health plans.
First, some interesting facts about open enrollment and health plan participation. This year, 5816 or 36% of the 16,265 eligible retirees and surviving spouses enrolled in a SDCERA sponsored medical plan. Of those participants, nearly 85% or 4936 individuals are 65 years or older and are enrolled in a Medicare Advantage or supplement plan. That leaves the much smaller group of 880 individuals, under age 65, who are enrolled in Kaiser, Health Net or United Healthcare. Additionally, about 1000 eligible Tier I and Tier II members participate in the Health Insurance Reimbursement program for reimbursement of allowable out of pocket cost for health plan premiums other than SDCERA’s plans. The remaining members, more than 60%, choose their medical coverage elsewhere that is “outside of SDCERA” such as recent retirees who continue their health plan through COBRA and others who use military health care or are eligible through other plans.
We are clearly in a time of significant change in health care eligibility, coverage, and the implementation of mandatory health plan enrollment on a national level. Since SDCERA is one of only three 37 Act Retirement Systems sponsoring health plans, out of a total 20 such systems, one might ask, “How long will health plans be offered through our retirement system?” We believe the SDCERA sponsorship will continue into 2015 as their consultant remarked, “It is much too soon to tell how successful the alternative public health exchanges will be.” At the recent SDCERA committee meeting, the consultants reported the mandatory health insurance enrollments are well below the enrollment goals set for the March 31st deadline at the national and state levels. They anticipate that little meaningful data will be available this fall to evaluate the success of the health plans provided through the public exchanges like Covered California. Further, the PPACA addresses health coverage for the pre-Medicare population i.e., those under 65 years of age. The smallest group now participating in SDCERA’s sponsored health plans.
The Covered California exchange provides health plans from some of the same insurers who participate in the SDCERA plan program. The exchange plans are divided into metal groups ranging from bronze, at the lower premium but higher patient cost, through silver, gold, and platinum, with the highest premium but lowest patient copay costs. Our plans through SDCERA are considered to be in the gold to platinum range. On the exchange, individual plan premiums may be subsidized by the federal government based on income. According to the consultants on the Medicare side of health care coverage, there are very competitive private exchanges offering health care enrollment and advocacy for those over 65 years of age.
The end result of all the discussion at this committee meeting was a request of SDCERA staff to provide retirees information about how to evaluate health care options. An important first question is, “Where do I get my health care now?” rather than, “What is the cost of one insurer’s plan compared to that of another insurer?” How do you compare plans? Comparing premiums alone does not tell you what your real cost will be should you actually use the medical services, have ongoing health care requirements or use prescriptions meds. The Health Benefits Committee is expected to meet again in the spring. We will participate and keep you informed about these important health care topics.