Shirlee Zerkel and Dennis Leone: A view on Medicare questions

Dennis Leone to Shirlee Zerkel, February 6, 2007
Subject: Re: questions you asked about Medicare

What an excellent summary, Shirlee. Thank you so much. You are sooooo right about how unfair the future may be. I assume also, since I am receiving an STRS pension, that even though I have 40 SS credits, I will fall victim to the two-thirds GPO rollback. I guess I should check with SS to see what my payment will be when I am 65. I don't even know if it would be enough to pay my Part B premium. I wonder what triggers whether it will be a deduction from one's SS check?

Dennis Leone

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From Shirlee Zerkel, February 4, 2007
Subject: questions you asked about Medicare

Hi Dennis, Hope you don't find this too wordy, but you know I was an English teacher.

Yes, your forty credits in Social Security will make a big difference when you are 65. You will be eligible for Medicare A at no cost and so will your wife. Do you receive a summary notice every fall from Social Security? It should state on the left side of the information that you are eligible for Medicare A and also if you might possibly be eligible for Social Security as well.

By having real Medicare A, you will be covered for hospitalization at 100% after you pay a deductible of about $900 for the first hospitalization of the year. If you want to stay in the STRS system for prescription drugs and the supplemental, you will also have to sign up and pay for Medicare Part B which is $93.50 a month for 2007. This you pay quarterly to Medicare unless you are eligible for a small Social Security pension and then the cost of Part B will be taken out of the SS check.

As it stands at the present time, the basic policy is not a good one to have with Medicare A and B because after Medicare pays their part, you would never have enough expenses to go over the $1500 deductible that STRS has. If you were 65 this year and on Medicare A and B and STRS Plus with a $500 deductible , your premiums would total $160.50 a month, $93.50 for Part B and $67 for STRS.

Medicare usually pays 80% of what they determine is reasonable and customary. The Medicare determination is all that the provider can expect to receive and then STRS is supposed to pay 80% of what is left after Medicare pays. You see then that STRS is paying very little of the health care for the 65 and above retiree who has both Medicare A and B.

A retiree, age 65 and over who receives their Part A coverage from STRS, will pay the same premiums to STRS and will also pay the $93.50 for Part B. Same monthly outgo as yours, but with less coverage! If they have the Plus plan, they will pay the $500 deductible and then 20% of the hospital bill. They have to use in-network providers which is a real headache, sometimes, because a patient can not control that all medical persons on his case are in the network. I am speaking here of STRS members only, not their spouses.

I moved my spouse from STRS supplemental to another cheaper one and have full 100% coverage. In this situation, STRS is paying almost all of a retirees' hospital stay. Large outgo of health care funds. But I do not recommend taking it away from the retirees.

NOW FOR THE REAL BAD NEWS if STRS should have to stop health insurance. You, John Curry and I are covered because all we would have to do is find another supplemental because we do have Medicare A and B. But the many, many retirees who never paid into Medicare will be in a 'huge world of hurt'. They will have nothing!. They will have to pay the $93.50 a month for Part B with no reimbursement from STRS, and they would have to pay $410 a month for Part A and a minimum of $29 a month for Part D. That total would be a cost of $532 per month for each member alone. That does not even consider the spouse.

That $500 plus cost does not include a supplemental, which helps by picking up some of the costs that Medicare does not. Dennis,this would include all who retired before 1986 and many who retired after that date as well. 45 educators in my school district alone who are still working have never paid into Medicare. Many of the thousands of retirees that this could happen to probably do not even receive $800 in pension benefits as they retired years ago. This should not happen to them. They will have no way to cover this huge increase in cost. They are dependent on STRS for this coverage: STRS should not leave them uncovered as it will mean many deaths will happen.

Dennis, what happened back in 1986 or 87 when it became law for Medicare taxes to be taken from the wages of newly hired teachers and not those already working for a district? They were not even given a option to pay the Medicare tax. Where were STRS and OEA because this became a huge drain on the STRS health care fund to completely cover the retirees for Medicare Part A? Did STRS receive a deal then similar to the one they received for Part D prescription coverage just this last year?

I have asked this question of others and no one even hears my request. NO one will answer my question on this one! I care about all teachers in the retirement system; we must do something to help safeguard these fellow teachers who will be left holding the empty health care bag if STRS does not have coverage in the future. What can we who are in CORE do?

Shirlee