Director of Retirement Services Bob Murphy attended the School Employees Health Benefit Plan Commission meeting on September 14. Here are his observations.
As a result of Judge Jacobsen’s Court Order (9/12/16) the School Employees Health Benefit Plan Commission met on September 14th beginning at 10 am with the meeting concluding at 1:30 pm. The Court Order stated that the meeting was for information gathering and that no votes on any retiree medical plan for SEHBP current or future retirees or any other substantive matter could be taken.
I attended the full meeting. It was clear to me that the presentations by both AON Hewitt (Actuary) and Horizon were designed to show that the only change from the present Medicare/Supplemental Plan to the propose Medicare Advantage Plan were in the “Mechanism” of paying providers and shifting risk from the State to Horizon. “Members would see no change in their benefit,” was a common theme from both.
So, what is the difference?
Under the Medicare/Supplemental Plan, you must go to a Medicare accepted provider since Medicare is your primary insurer. However, the provider may not be ‘In-Network’ for Horizon – in which case you would be subject to the out-of –network co-insurance and any deductible. If you go to an ‘In-Network’ provider for Horizon – you will only need to pay your ‘co-pay’. You would receive 2 EOB’s. In addition, the State is ‘self-insured’ so they accept the ‘Risk’ for expenses that they pay through the supplemental plan.
Under the proposed Medicare Advantage Plan all providers that Medicare provider are considered ‘In-network’ with Horizon. Your only cost would be your ‘co-pay.’ You would only receive one EOB. The Risk for expenses shifts from the State to Horizon – since the State would pay Horizon a premium. Horizon’s earnings come from the savings they negotiate with their Medicare providers. There is also an agreement with the State that the must payout at least 90% of the premiums – if they payout less, that amount would be returned to the State.
Many of the questions asked by the Commission members focused on any differences between the two plans in order to ensure that the Medicare Advantage Plan would be ‘Equal to or better.’ In my opinion, there are some differences the Plan Design, which would by statue require the SEHBP Plan Design Committee to vet the plan and approve/not approve this change.
This matter now returns to the Court for the ‘next step’ in the process. Therefore, no changes in retiree Medicare plans have been approved as of this date – we will keep you informed as the process moves forward.
Director of Retirement and Benefit Services