Guilford to move older retirees to new health plan
Following the lead of some big companies, and perhaps others to come, Guilford County officials next year will move 640 county retirees over age 65 out of the county’s self-funded retiree health care plan.
The change commissioners approved Monday is aimed at saving as much as $2.3 million a year in health care costs and saving each retiree as much as $400 annually in premiums. A United Health Care representative called the plan “rich” and Republican Commissioner Jeff Phillips told the Board of Commissioners he thought the offer was “exceptional.”
Upon final approval, the plan takes effect Jan. 1.
United Health Care tailored the Medicare Advantage Plan for county retirees. Retiree premiums would be about $35 per month, down from $70. The county would contribute $188 per month per retiree. The county’s share depends on a retiree’s years of service.
For that, the annual deductible would be capped at $200 in the basic plan. After that, there would be no copayment on most medical services and the copayment cap would be about $1,000. Most common prescriptions will be covered and there will be discounts provided for hearing and vision needs. Retirees will be able to use network and out-of-network services with little or no extra charge.
“This is a very rich plan,” said John Thompson of United Health Care, which has a large office in Greensboro. “The plan pays for preventive services at 100 percent and there are no caps on visits like you see in commercial plans.”
Many companies are considering severing retirees who can use Medicare benefits from their health care plans. Other companies are moving retirees to health care exchanges where they can shop for plans. Last week, Duke Energy announced that 14,500 retirees will no longer have a company-run health insurance program. Instead the retirees will get a stipend from the company, which they can use to buy their own health insurance from United Health Care. Instead of giving retirees a stipend, the county will pay most of the premium to United Health Care.
The change also relieves the county of liability because the insurance company assumes administration of the coverage.
“This is a benefit for the taxpayers,” Phillips said. “We have 100 percent of the risk now for this group. This transfers the liability.”
Medicare Advantage plans, offered by private companies, cover gaps in government coverage in Medicare Part A hospital coverage and Part B medical coverage. Individuals can choose similar “advantage” plans, but they do not include most of the “extras” in the proposed county plan which would be renewed each year. The private plans also help with out-of-pocket costs and prescriptions.
Thompson said his company can offer such a “rich” plan because it draws funding through Medicare, not available to self-funded plans, and drug makers who are participating in health care reform with discounts. For example, there is no “gap” in prescription coverage in the United Health Care plan.
Although the plan won 8-0 approval from commissioners, several had some doubts.
“The savings are a good deal, but it could be too good to be true,” said Democratic Commissioner Bruce Davis of High Point. “We are not used to savings like this.”
Thompson said that federal funding cutbacks won’t affect health care. County Manager Marty Lawing encouraged approval.
“We can save significant dollars with this and the retirees will save,” Lawing said. “If we don’t make this change, there will be upward pressure on what we and the taxpayers pay for coverage.”
Health Care Changes
Over 65: Duke Power joins large companies including IBM, General Electric, Time Warner, DuPont and Caterpillar that are moving retirees off company-run health plans and offering a direct subsidy for health care.