Medicare Advantage Retirees
A letter was sent to all non-Medicare retirees in August to alert them to the following information. If you didn’t receive it, the letter is available for download.
As you may be aware, the City of Fort Worth has been grappling with the high cost of healthcare over the course of many years. During that time, several difficult decisions have been made with the goal of maintaining the availability of high-quality healthcare while controlling costs. A few examples that directly impact retirees over 65 on the Medicare Advantage Plan include:
- All retirees who are 65 or older have been transitioned to a fully-insured Medicare Advantage plan.
- Employees hired after Jan. 1, 2009, do not receive any subsidy for their healthcare upon retirement.
- The Healthy Challenge wellness payout to retirees has been eliminated.
Rates for 2018
Post-65 Medicare Retirees (Per Month)
|Retiree only||Retiree + spouse|
- 2018 Retiree Open Enrollment Form (Medical and Dental)
- 2018 medical rates per month for retirees
- 2018 monthly dental rate for retirees and surviving spouses
What are the challenges we are having with the city’s health plan?
Medical costs of city employees, retirees and dependents exceeded budget by $16 million in FY2016 and are projected to do so by $10 million in the current fiscal year.
As a result, the city has dipped below its reserve requirements and needs to consider all alternatives to reduce costs or increase premiums. This is a shared expense by the city and the plan members, so it is important for all of us to keep it affordable. Putting more money into the plan will not have any effect on the long-term trend, so the city is looking at other alternatives.
What is driving the cost increase?
DFW is an expensive health care market with some providers charging substantially more than other parts of the country. Additionally, we continue to see excessive use of emergency rooms by members on the city’s plan.
The city also has a growing population of pre-65 retirees who are not paying into the fund, but who are supported by premiums from the city that has grown from an annual cost of $3.8 million in 1990 to $32.5 million in 2017. If the trend continues, that cost will be unmanageable for both members and taxpayers, as people are living longer and health care technology is providing advanced options for care.
Finally, the federal government is reinstating the Health Insurance Fund/ACA Excise Tax, which will cause a cost increase of $1.1 million for retirees on the Medicare Advantage plan.
What is proposed for working retirees and working retiree spouses?
Retirees and retiree spouses who are already on the Medicare Advantage Plan will remain on the plan even if they are currently employed and working for another organization. However, retirees and/or retiree spouses who are not yet 65 years of age, and therefore not on the Medicare Advantage Plan, will be required to leave the city’s plan and elect coverage with their current employer. However, should they lose coverage or leave that job, they can return to the city’s plan within a 30 day time period.
This follows the new plan protocol for working non-Medicare retirees as well as working retiree spouses, and will be effective January 1, 2018.
What changes are coming for retirees on the Medicare Advantage Plan?
The Human Resources Department has received the renewal proposal from Aetna and they are requesting 21.9% increase in 2018. Two-thirds of the increase is due to the reinstatement of the Health Insurance Fund/Affordable Care Act Excise tax.
Therefore, in order to maintain a premium Medicare Advantage Plan to members, plan design changes are necessary for both the medical and pharmacy benefits to balance the impact among plan members, tax payers and plan design changes.
Currently the Medicare Advantage Plan, administered by Aetna, is the only plan offered to retirees over 65. Retirees are responsible for the Part B monthly premium that is paid directly to the Social Security Administration. In addition, current retirees who cover a spouse and/or those who worked for the city fewer than 25 years pay an additional monthly premium to the city. All of these factors will continue as part of the 2018 healthcare plan.
However, there will be two changes that retirees should prepare for:
- Members can expect to pay 5% co-insurance in the new plan year, and the plan will now cover 95% of medical costs.
- There will be an out-of-pocket maximum of $1,000 for medical costs per member.
For the pharmacy plan, retirees will continue the same process for filling prescriptions. Retirees will still be able to access Aetna Rx Home Delivery for pharmacy mail-order services and Aetna Specialty Pharmacy for hard-to-fill medications. With Aetna Rx Home Delivery Service, a 90-day supply of medications can be ordered and regularly delivered to your home or another location of your choice with no additional cost for standard shipping.
Pharmacy plan changes for 2018 will include:
- The pharmacy deductible will increase from $50 to $100.
- A change to the pharmacy formulary will impact 3% of the plan members because the plan will go from open to closed, meaning there may be some medications that are no longer covered.
- Co-pays will no longer be waived once the member meets the catastrophic threshold, which means there will no longer be a limit placed on out-of-pocket costs for pharmacy. Currently, once the member’s drug costs reach $5,000 total (member cost and plan cost) the member’s co-pays were suspended. Members will now have co-pays for medications throughout the plan year.
Fast Facts of 2018 plan changes:
- All retirees who are over the age of 65 have been moved to the Medicare Advantage plan as of July 1, 2017.
- Retirees should expect a slight increase to monthly premiums from Medicare.
- The pharmacy formulary will change from open to closed, but less than 3% of plan members will be impacted.
- The pharmacy deductible will increase from $50 to $100.
- Members are subject to 5% co-insurance on expenses up to $1,000, and once the $1,000 out-of-pocket maximum is met, the plan will pay 100%.
Important dates and contact information:
Open enrollment meetings are scheduled for October. Dates and locations for these meetings, as well as additional information about healthcare plan changes, are available on the Open Enrollment website or by calling the HR Benefits team at 817-392-7782.
The City Retiree Hotline is 817-392-8644.
Contact Social Security at 800-772-1213.
To contact Aetna directly, call 800-594-9390 to speak to pharmacy management and 866-612-3862 to speak to Aetna Rx Home Delivery.
The new healthcare plan benefits begin Jan. 1, 2018.
200 Texas St.
Fort Worth, TX 76102
817-392-7782Hours of Operation:
8 a.m.-5 p.m., Monday-Friday