April 21, 2010 Report from UBAB to CURFA


Stuart A. Schneck


            I am sorry that I am unable to present this report in person, but I am obliged to be somewhere else today. I thank Jim Wolf for his courtesy in presenting it to you in my absence. The information to be given is as of the last UBAB meeting that was held on April 2. Should anything change before April 21, I will pass that information on to Jim.

            I assume that most of you participated in the health insurance dependent verification project that the CU administration embarked on so as to be sure that they were paying only for appropriate dependents. Experience with similar surveys in other comparable institutions suggests that only a small number of dependents had been found to be inappropriately covered by the institution, but enough to make the survey fiscally worthwhile. The data from the CU survey will probably not be known until early July, and UBAB has been told that approved dependents will be issued new ID cards when the survey is complete. So far, our Payroll and Benefits System (PBS) has received relatively few complaints about the process that has caused inconvenience for some people in obtaining proper documentation to send to the company running the survey.

            A CU analyst has made a timeline survey of the health care reform legislation recently passed by Congress and signed by the President. This is a very early and incomplete analysis of the law, and as more information appears it will be shared with you. Those items in particular years that relate to retirees with Medicare, without specific details, are as follows:

            2010: a) There will be expanded Medicare payment protections for small rural hospitals. Presumably this is supposed to narrow the gap relative to what large hospitals currently receive.

                      b) Those who have Medicare Part D coverage with a gap known as the “donut hole” will receive a $250 check from Medicare this year.

            2011: a) There will be a 50% discount on brand name drugs purchased by Medicare recipients while they are in the “donut hole.”

                      b) There will be free annual wellness visits and waiver of all cost sharing for preventive services for Medicare beneficiaries.

                       c) A 10% Medicare bonus payment will be given to all primary care physicians and general surgeons.

                       d) A center for Medicare and Medicaid will be established to test innovative payment and service delivery models to reduce health costs and enhance the quality of care.

                      e) Medicare Advantage (Part C) payments to insurers will be frozen at 2010 levels and will be reduced over several subsequent years.

            2013: a) States will be required to pay Medicaid primary care physicians the same rate that Medicare pays them, with the federal government funding any additional state costs.

            2020: a) The Medicare Part D coverage gap (“donut hole”) for generic and brand name drugs will be eliminated.

            There is no indication at this time that any of the CU health plans, including the Medicare Primary Plan, will have any deleterious new tax consequences for anyone.

            It is now certain that the administration is going ahead to self-insure our health plans. Open enrollment will take place from April 26 to May 21. A point to be emphasized – if you do not wish to change your health plan enrollment, such as in what is called Medicare Primary by Anthem, you need not do anything and you will be continued in your current plan. If you wish to make a change in your plan, you will be sent information by mail and can make your change using mail. Active faculty now will enroll in or change plans entirely by electronic means. PBS recognizes that some seniors have visual or other medical problems that make electronic enrollment difficult and so, as a courtesy, are continuing the familiar mail enrollment process for us.

            Nothing is yet known about new premium rates and it may be, as happened last year, that we will have to wait until early May for them to be made public. The hang-up is always the CU contribution to premium rates, for this is based on the CU budget from the state that is embodied in the Long Bill. Until that is law, nothing can be done. When rates are known, retirees will receive this information by mail while active faculty will get it electronically.

            As requested, I raised the issue, with a person involved in the self insurance planning for the administration, of inclusion of the Silver Sneakers exercise program in the Medicare Supplement plan to be forthcoming in July. I do not yet know when a decision about this will be made.

            Finally, no decision has yet been made about whether the amount of the AMP benefit will be changed.

            I am sorry that I cannot answer any questions in person. If there are any, Jim Wolf can give you my Email address and I will do my best to respond promptly.