Tens of thousands of public retirees are more actively overseeing their medical coverage on the eve of major changes meant to preserve the health-care fund at Ohio’s largest public pension system.
The 230,000 retirees, spouses and dependents who have coverage through the Ohio Public Employees Retirement System all will see some changes in 2016.
For starters, retirees who aren’t yet eligible for Medicare will see their annual deductibles increase to $1,000 from $850, and they’ll also face higher premium contributions for spouses, part of a three-year phase out of premium assistance for spouses.
But about 145,000 people with OPERS health coverage who are Medicare-eligible are facing another major shift. The pension system no longer will sponsor its own Medicare plan and instead will fund reimbursements for retirees who choose supplemental coverage.
The deadline to sign up for that supplemental coverage is Dec. 31.
Most members will receive $337 or more each month to help pay for Medicare Advantage, Medigap or other Medicare supplement plan, as well as a prescription-drug plan.
Officials said the changes were necessary to preserve the health-care fund at OPERS, one of a few pension systems in the nation that have one. In 2012, when the changes were approved, officials said the fund would have faced insolvency in about 10 years without taking such steps. OPERS spent $1.6 billion on health care in 2013, up from $328 million in 1995.
“We want to make this very large change, and not make further changes unless we absolutely have to,” OPERS spokeswoman Julie Graham-Price said.
Individual Medicare plans have become more affordable, and the OPERS group Medicare plan that is being discontinued could no longer compete with those plans on price, said Marianne Steger, OPERS health-care director.
Retirees now can pick a Medicare plan and drug plan for about $200 per month, she said, and retirees in many cases should get enough reimbursement to also help cover their premiums for Medicare Part B. OPERS has been scaling back reimbursement for Part B premiums and will no longer help pay for them by 2017.
Some retirees also will face more exposure to prescription-drug costs, said William Winegarner, administrator of Public Employee Retirees Inc., the lobbying arm for OPERS retirees. But OPERS has tried to soften the impact of drug and other health-care costs by providing an additional supplement of $300 annually for the next three years.
“Some retirees who don’t take a lot of prescriptions might benefit from the plan,” Winegarner said.
Ohio State University’s Wexner Medical Center recently has received 100 to 150 calls per day from retirees and family members who are concerned about the changes and want to make sure they can continue to receive care from OSU doctors, according to Debra Lowe, administrative director of revenue cycle.
In another move to shore up the OPERS health fund’s finances, eligibility requirements have been tightened. Those who retire must now have 20 years of service and be 60 years old to qualify for coverage, or have 30 years of service to retire at any age and still receive that coverage. Previously, retirees needed to have only 10 years of service and could qualify at any age.
And OPERS no longer is funding nearly 100 percent of premium costs for retirees, instead contributing 51 percent to 90 percent of premiums, depending on years of service and enrollment age.
OPERS also recently approved separate health-care plans for retirees who are “re-employed” in OPERS-covered jobs. Federal health-care law changes had threatened to force nearly 4,300 or so retirees who are 65 or older to choose whether to give up their OPERS health-care plan or leave their jobs in order to retain that coverage.
Those re-employed retirees who choose the new plans will pay about $600 more per year for their health coverage, according to Graham-Price.
Polly Lacy, 82, of Columbus, retired in 2001 after 10 years as a Social Security disability claims examiner, a federal program administered by state workers like her. She signed up for supplemental coverage last week.
“I had been so scared about the change,” she said. “There are so many people who have been so upset.”
The transition has meant telephone calls with hold times as long as an hour, Lacy said. But once she got through, she said she was pleased with the assistance she received from representatives of OneExchange, the company that is helping retirees choose plans to supplement traditional Medicare..
And despite initial misgivings about how she would pay for premiums upfront and then receive reimbursement, she said credit cards will help her make it work.
She’s satisfied with her choices. “What I wanted was to find the least expensive MediGap program so I would have some allowance left over to pay other premiums,” Lacy said.
“In the long run, I think it will work out well for me.”