October 2009 Retiree Notes

October 19, 2009

Retiree dental premium challenged

AFSCME is in the process of challenging the Quinn administration’s announced decision to levy a new monthly premium charge on state and university retirees for dental benefits provided under the Quality Care Dental Program.

“The union had no warning of this policy change and we will use contractual, legal, and other tools to attempt to reverse this action by the Quinn Administration,” Council 31 Director Henry Bayer said. “We believe the unilateral implementation of this charge is a violation of the AFSCME contract.”

The grievance filed by Council 31 will be heard by an impartial arbitrator, who will rule on whether the state has violated AFSCME’s master contract by raising the rates without negotiating with the union.

Effective Oct. 1, the state has announced it is raising monthly premiums for retirees to the level paid by active state and university employees for dental coverage: $11 for member-only coverage, $17 for the member plus one dependent coverage or $19.50 for the member plus two or more dependents.

Participants are given the option to drop the dental benefit if they choose. “The Quality Care Dental Plan is a very valuable benefit,” said Maria Britton, Council 31 director of retiree programs. “AFSCME is advising retirees not to drop their dental coverage out of fear of these new dental premiums. At the very least they should wait until Council 31 has exhausted its due process rights.”

The state is facing a severe financial crisis with a $3 billion to $4 billion hole in the current budget and an estimated $10 billion to $11 billion deficit expected next year, she said. “We must not allow this crisis to be settled on the backs of retirees. If the state is allowed to unilaterally increase benefit costs for retirees now, where will it end?

“We are urging members to call their representatives and the governor’s office and urge them to pass legislation to raise new revenue instead of overburdening retirees.”

The only framework currently alive in the General Assembly that raises sufficient revenue is HB 174. This AFSCME-backed bill would increase the income tax rate, while doubling the property -tax credit.

“Every call matters,” Britton said. “AFSCME Council 31 and Retiree Chapter 31 will continue to stand against any threats to retirement security.”

 

Deep cuts coming in state aid for seniors

The state Department on Aging is slashing funding for Circuit Breaker – the program that provides grants to senior citizens and persons with disabilities to help mitigate the heavy load property taxes and prescription medications place on them.

“Unfortunately, this is just another effect of the irresponsible budget passed by the General Assembly,” Chapter 31 President Virginia Yates said when she heard about the cut.

The program currently has 35,000 eligible applicants, who are now expected to get only 50 percent of the money they had anticipated. According to the department, “when the costs of property taxes and prescription medicines begin to ‘overload’ our seniors and persons with disabilities, this program steps in to help, just as a circuit breaker prevents overloads in an electrical system.”

The fiscal 2010 budget reduces Circuit Breaker funding to $24 million, from $44 million in the previous year. Rather that cut the number of grantees, Aging decided to cut each grant in half.

 

White House addresses retirees’ health-care concerns

The White House Office of Public Engagement and the president’s Health Care Policy Team have reached out to retired people to answer questions on health-care reform.

Here are some of the most important recurring questions that retirees have as AFSCME and AFSCME retirees carry on the fight for reform.

Why should I care about health care reform if I already have coverage?
People who have health care coverage, including Medicare beneficiaries, have been seeing substantial increases in their costs. In fact, the cost of health care doubled between 1996 and 2006. Employers who provide coverage for workers and retirees have also seen their costs increase.

One problem is cost-shifting by health care providers. When those without coverage – more than 46 million Americans — seek medical attention, they often wait until an injury or illness  is very severe and then seek costly emergency room care they can’t afford. Hospitals and doctors routinely shift those unpaid costs to patients with insurance, who end up having these hidden amounts added to their premiums. The average insurance policy for a family is now $13,300 a year, with about $1,000 of it going to pay for care of the uninsured.Average annual cost increases of 15 percent for state-retiree health plans have been reported by 43 states that responded to a recent AARP survey. Two-thirds said these rising costs were “very important” in terms of state budgets and potential cost-shifting to retirees. Almost all states have taken some action to control costs, including changing benefits, increasing retiree cost-sharing and pushing retired employees into Medicare Advantage plans (the Bush administration’s scheme to privatize Medicare).

Will a public option force employers who currently cover retirees to drop them?
No. Health care reform legislation includes strong incentives for employers to continue the coverage they provide now – for workers, early retirees and those over 65.For retirees over 65, Medicare would remain the primary insurance, and employers would continue to be encouraged to provide supplemental benefits. Health insurance coverage is currently not guaranteed by law and employers can drop it at any time without incurring a penalty unless it is negotiated in a union contract. Health care reform would add penalties for employers who drop coverage.

People under 65 who don’t have coverage from their employers would be able to buy affordable coverage in a new health insurance marketplace called the “exchange.” They would be able to choose from a variety of private insurance plans. AFSCME supports having a public insurance option in the exchange. It would be similar to Medicare, but available to those under 65. Like Medicare, we think the public-plan option would be more cost-efficient that private plans (no profits, no sales marketing, no high CEO salaries) and give participants more value for their money. But a public option would be just that, an option for those buying coverage in the exchange.  

Would health care reform bills cover illegal immigrants?
No. The House and Senate bills on health care reform include language explicitly banning the use of all federal dollars to cover illegal immigrants for health insurance.   What are the death panels we hear about in the news?

There are no death panels. This idea arose out of a brief section in the House bill on “advanced care planning consultations.” Under this provision, Medicare would start reimbursing doctors who take the time to talk with a patient  about what kind of care they want near the end of life, when they may be unable to make decisions on their own. Consultations could include information on how to obtain a “living will” and how to name a legal health care proxy. These consultations would be strictly voluntary. But if a Medicare beneficiary wanted the service, Medicare would reimburse the doctor for his or her time. Proponents of this provision considered it to be an additional benefit for seniors, but it’s been twisted to appear to be an evil plot.

Will health care reform require cuts in Medicare benefits?
No. But health care reform does save money in Medicare by reducing waste and fraud; by eliminating overpayments to private insurance companies that increase profits without improving benefits; and by establishing innovative cost-containment mechanisms. Saving money for Medicare is critical, because a Medicare shortfall is expected in 2017 and we need to preserve Medicare’s ability to cover older Americans now and in the future. Savings, however, will not come from benefit cuts.

In fact, health care reform bills will improve and strengthen Medicare. New benefits would include phasing out Part D’s big gap in drug coverage, known as the “donut hole”; requiring drug companies to provide 50-percent discounts to Medicare beneficiaries with big drug bills; and by eliminating all co-payments for preventive services, such as cancer screenings. Health care reform will also create a new payment schedule for physicians, who are slated to take a 21-percent reduction in reimbursement rates in 2010 unless something is done to avert it. The new and fairer payment schedule will ensure that doctors will continue accepting Medicare patients in the future.

 

Retirees get information on health-care issues

Discussions on the details of health-care reform measures being debated in Congress as well as how Illinois’ state budget crisis affects seniors’ health care were held recently by the Illinois Alliance for Retired Americans.

“The meetings definitely allowed seniors to air their questions and concerns regarding both health care and the state budget,” said Joyce Brown, president of Rock Island Sub-chapter 74.Held in Collinsville, Peoria, Rock Island and Joliet, the meetings showed a consensus among retirees that Medicare needs strengthening. Seniors also want the Part D drug plan fixed — by allowing the federal government to negotiate for lower prices and closing the “donut hole.”

The state’s deficit and the implications for services and programs paid for through state funds were also discussed, with agreement that the solution is raising new state revenues.