Town Administrator Jean Kitchen told selectmen last week that a change in medical plans for retirees could save the town nearly $170K per year. In the face of a $1.1M budget shortfall, selectmen said they were interested in learning more about the proposal.
At town meeting last year, voters approved a measure that would require all future town retirees who get health insurance from the town to enroll in a supplemental Medicare plan. The proposal before selectmen last week was whether current retirees should be required to do the same under the state’s Section 18 regulations.
Kitchen said the switch to a Medicare plan would affect 31 current retirees. Individual subscribers would pay approximately $390 more per year for the Medicare plan. Family subscribers could actually save up to $160 in premiums each year. Kitchen said the existing plans and the Medicare plan are similar in terms of the services they cover.
More than 140 municipalities in the state have adopted Section 18, including towns like Northborough, Westborough, and Sudbury.
The Board of Selectmen have considered Section 18 for several years now, but so far have declined to put it on the warrant at town meeting. This year may be different. “I believe it’s time,” Selectman Bill Boland said. “We have to look at this again seriously.”
Selectman John Rooney said he was also interested in learning more, but said he wanted town retirees to be part of the discussion before deciding whether to put the article on the warrant. “I don’t want retirees to be blindsided at town meeting,” he said.
If approved by Town Meeting, the change would go into effect in fiscal year 2013.
Update 2/17: There have been questions in the comments about some of the details of the Section 18 proposal. Here is the presentation Town Administrator Jean Kitchen gave to Selectmen last week with more information. The selectman said they plan to discuss it more at a future meeting before making a decision on whether to recommend the plan.
On 2-14-11 the Metro West News said that there were 42 retirees who would be effected The towns share for an individual plan for Fallon would drop from $524 per month to $193 the family plan would drop from $1420 to $420 then goes on to say they would get the same services as they get now I think not
On 2-15-11 on this blog it was said that there would be 31 retirees effeccted and it would cost $390 more per year for an individual plan. what happened to the other 12 when you go into Medicare it will cost $115 per month on July 1st of this year. which will cost $1770 per year more.
Medicae is 60 trillion yes with a T in unfunder libilities and is in the foirefront of entilement cuts in the Federal budget.
how are they going to put retirees who retire before 65 into Medicare
I think it is unjust to do this to people who have given themselves to this town for many years I thank Mr. Rooney for the concern he has for the retirees. Buzz
Buzz:
Cities and Towns in Mass face a similar unfunded liability in terms of provision of health care benefits for retirees. The money for these benefits was never accrued for the benefit of the retiree during their employment and thus we have been operating without an accurate estimate of the true cost of a public employee.
My understanding is as follows
Retirees not eligible for Medicare (eg those under 65) would still receive private insurance as in the past.
Retirees eligible for Medicare would go on that program and the Town would pay for a Medicare gap coverage plan so that the net result would be coverage similar to what they currently have. This is the sort of gap coverage many retirees have.
Yes, Medicare is not fully funded and its coverage rules are likely to change. But the difference should be covered by the gap plan.
Buzz, we have a big problem, we do not have enough money to pay teachers, police officers, fire fighters and other current employees. Should we lay off some of these folks in order to preserve the status quo for retirees? Our business model is broken and unsustainable and we have to begin having a very frank discussion about how we get out of this situation.
Buzz, here’s the scoop on the 31 vs. 42 number from Town Administrator Jean Kitchen:
What would be the downside of this? Frankly, I don’t see one, but I’d appreciate being educated on the topic by those who do.
Al
Your point is well taken may I ask who says the town is going to pay for the Medicare gap coverage. That was never mentioned from the town hall in the article. Could someone tell me how the retirees are going to get the same coverage they now have when the Towns share is going to drop by upwards of 60% or more. The problems lies with the schools as you well know Buzz
Buzz:
That was my understanding of how the program would work. I could be wrong but that is what I remember when it was explained. If there is anyone who can clarify that would be very helpful.
Kelly
The only downside is if you were retired from the Town Buzz
They don’t lose coverage. They just get covered by a Federal program that they’re entitled to as soon as they reach 65. What’s the downside? Less coverage? Different doctors? What?
I do not know if this is correct, but I have been told that some retirees pay nothing towards their health costs and the town pays the whole portion.
Could the selectmen look into this? It seems fair that all town retirees should pay the same amount and all should help shoulder part of the burden of their health costs.
Also, while I appreciate Mr Rooney’s expression of concern to ensure that town retirees are not blindsided, I hope we can all support a measure that will save so much money for the town and “Family subscribers could actually save up to $160 in premiums each year.”
That sounds like a win for everybody.
I don’t believe that is accurate information as far as some retirees not paying anything. I think we all pay the same rate.
I just posted the presentation Jean Kitchen gave selectmen last week. Perhaps that will help clear things up. You’ll find the link above in the body of the main post.
Buzz, I’ll also see if I can get to the bottom of the 31/42 discrepancy you pointed out.