Legislature swallows 'bitter pill' on insurance
Published: October 1, 2013
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ST. THOMAS - Just minutes before the current government employee health insurance plan was set to expire at midnight Monday night, the 30th Legislature ratified contracts for the government's Fiscal Year 2014 insurance plans.
Senators expressed frustration with the entire process, annoyed with the fact that they received the contracts they were expected to ratify the day before the FY 2013 contract was set to expire.
"It's really one of those bitter pills you have to swallow," said Sen. Clifford Graham.
Senators noted that the last-minute arrival of the government insurance plan for them to ratify, just before the old plan expires, has become the norm.
The FY 2014 health insurance plan features an overall increase of approximately 10 percent in government spend, although the increases government employees and retirees will see in their premiums vary based on their circumstances and the plans they have.
For example, a single active government employee will see premiums for medical and dental rise from $95.57 to $119.68 per paycheck under the new plan, an increase of more than 25 percent. However, single retirees older than 65 will see premiums drop from $68.13 to $40.09 - although they also will see more out-of-pocket expenses, according to information provided at the hearing.
This year, the insurance for retirees older than 65 will be handled by United Healthcare's fully-pooled "AARP Medicare Supplement Plan N", while CIGNA will continue to handle coverage for active employees and for retirees younger than 65.
Medicare-eligible post-65 retirees represent a third of government-funded participants in the Medical Plan, and moving them into the United Health Care plan will have "substantial" financial benefits for the government, including a savings of $7 million in premiums for the government annually, according to Government Employees Service Commission Health Insurance Board chairwoman Clemmie Moses.
Last year, she said, an 8 percent rate increase was required to adequately fund the benefits for the retirees.
For retirees older than 65, the insurance acts as a supplement for Medicare, although it also provides primary prescription drug coverage, Moses said.
Those retirees can "buy up" to a higher level of Medicare Supplement - United's Medicare Supplement Plan "F" - by paying the full cost difference of about $50 per month, Moses said.
Retirees have expressed frustration with the situation. In response to a question, Moses said that if the government wants to pay its 65 percent portion of the cost difference for Plan F, senators would have to find approximately $2.3 million.
Moses' testimony, given as the Legislature was in Committee of the Whole on Monday, also addressed the issues that caused the contract to be so late in getting to the Senate, and advocated for some changes to the law that would give the board more autonomy from the Central Government.
Senators said they did not have time to read the contract in detail before having to take action on it.
Senators Judi Buckley, Diane Capehart, Donald Cole, Kenneth Gittens, Clifford Graham, Myron Jackson, Shawn-Michael Malone, Terrence Nelson, Clarence Payne III, Sammuel Sanes and Janette Millin Young voted for ratification. Senators Alicia Hansen and Tregenza Roach voted no, and Sen. Craig Barshinger did not vote.
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