Dean Werstler: STRS Retiree Health Care Problem

STRS cutting corners? It sounds like it...in a subtle but painful way -- as this STRS retiree is finding out! How many other retirees haven't found out yet by the learning by doing method?
~ John Curry, 8/11/07

Dean Werstler to Dennis Leone, August 6, 2007
Subject: STRS Retiree Health Care Problem

Dear Dennis,

My name is Dean Werstler and I am a retired administrator (with 30 years of service in the STRS system) for six years now. My wife and I live in Tucson, Arizona full time. My wife has 23 years of service and will not receive benefits for another two years. We currently participate in the STRS sponsored health care plan. For the last six years our monthly premiums have increased and it feels like our benefits have decreased. We are currently on the Medical Mutual Basic plan with a very high deductible. We have also had numerous problems with Medical Mutual getting claims correctly paid over the years. Fortunately we are both currently healthy and have chosen the basic plan in order to reduce our monthly premiums. We are trying to be good stewards of our health care dollars. We also visit providers who are "in network." Each year we agonize over which plan will be better for us before making our choice for the next calendar year.

The purpose of this letter is to thank you for your dedicated service to the retirees of the STRS system. I truly believe that you have all of our best interests in mind and have a demonstrated track record to that effect.

I also wish to inform you of a problem that I am facing with the current health care system. I believe that this problem may be the tip of the iceberg and many other unsuspecting retirees may be in for a shock. I am referring to Medical Mutual and their out of state network, PHCS, for us retirees living here in Arizona.

My local in network physician has informed us that she will no longer accept PHCS. I asked her why she made this decision at my recent annual physical. (I appreciate the fact that a preventative physical is totally covered as a wellness item this year). She told me that PHCS has a new owner and they presented the new reimbursement schedule to her for her annual renewal. She states that the rates they are willing to pay her are less than Medicare! In fact she said, " I would rather make my phone calls and then go home in the afternoon than accept what they are willing to pay me." She also said that our new state of the art hospital in Oro Valley, Northwest Medical Center, is also dropping PHCS because of the low reimbursement rates. It seems to me like we have a systems problem here in the making. I wonder how many other providers in the PHCS network will also have the same feelings and refuse the coverage? I also wonder how many of us retirees will be surprised by this new development and be forced to make some very uncomfortable decisions? I also suspect that renewal contracts come up at different times of the calendar year. If this is the case, we will have a delayed reaction to this new development.

I feel strongly enough about this issue that I called STRS today and requested to speak to a Health Care Advocate in hopes that she would understand my problem, see the future potential problems, and champion my (and our) cause. I talked with Kathy Crawford (Health Care Advocate) and explained to her the above. She indicated that she was aware of the change in ownership of PHCS but that I was the first person that she talked with who had a provider drop PHCS due to the reimbursement rate. She also explained to me all that STRS is doing to keep the health care system reasonable. She said that Medical Mutual chooses the out of state provider, not STRS. I kindly reminded her that Medical Mutual works for STRS, not the reverse. She indicated to me that I have other options: continue to see my current physician out of network; choose another physician in the network; or choose a different coverage for next year. Two of these options mean that I could not use my current doctor of the last six years and all three would cost me additional money. (Due to a network change by STRS, I have already had to switch dentists.) She indicated to me that she would approach the subject with Medical Mutual and respond back to me. I was very pleasantly surprised to receive a return phone call from her later in the day. She had talked with Medical Mutual and they do not feel this is a problem at this time. She said, "Medical Mutual feels that there are thousands of in network providers out there to choose from." They will continue to monitor the overall situation. Kathy again reminded of my other options within the STRS health care system. I asked her to specifically check some of the reimbursement rates for PHCS (old and new) and respond back to me.

Dennis, I really feel like I am a very small fish in the ocean on this issue. I do not feel that Medical Mutual sees a potential system problem nor does STRS. I feel like the Health Care Advocate was more supportive of Medical Mutual and the STRS administration line and not very understanding or sympathetic of me, the retiree. I also feel, through no fault of my own, that there has been a mid-year change to my health care plan that I chose in good faith. I am now stuck with this change for the remainder of this calendar year. I will need to know who the out of state provider is for Medical Mutual for Arizona for calendar year 2008 before I make my decision. If I choose AETNA it will cost me more money for monthly premiums. We will also be forced to consider private insurance.

Thank you for your time and consideration. I appreciate all that you do for the retirees of STRS.
John Curry to Duane Tron, August 11, 2007

Duane, Thanks for this letter. I am not referring to all those in the insurance industry..there are a lot of people who work there who are "ground level" employees and who no more share in the insurance industry glut that we do as STRS retirees. And yes....neither can I afford to go to the Sun Belt (New Mexico.. in my case) and establish a dwelling thanks to the spousal subsidy elimination (aka screwing) that STRS bestowed on my family thanks to its lack of planning but instead spending and globetrotting. The "hurt" is finally being felt by a number of STRS retirees and they are starting to feel the squeeze that we have been warning about for years...too bad many of the "actives" don't know what lies ahead in their future. John

Duane Tron to John Curry, August 11, 2007
Subject: Re: STRS Retiree Health Care Problem

John,

I know Dean from my administrative days. I can truly empathize with him and his problems. On the other hand he and his wife were able to move to Tucson to retire. There are a lot of us who CANNOT afford to move anywhere in the Sun Belt, let alone Tucson. My wife and I were given 35 acres in Colorado as a wedding anniversary gift, by our daughter, and we can't afford to move there. We can't afford to build a small house in our retirement. I was planning on building a 1,200 square foot house, not overly big or pretentious by any scale, and we can't afford it. Why? In
2002 they screwed me by eliminating the spousal subsidy. Although I feel bad for Dean, the rest of us will be spending our "Golden Years," freezing our you know what's off here in the Arctic zone. I didn't experience too much global warming last winter and I suspect this one will be colder. Ah! Some of our comrades are finally getting the wake-up call! Imagine that?! Wait until about another 50,000 figure out how bad we have been screwed and we'll sit and listen to them squeal. When I spoke to a lot of these people five years ago they weren't concerned because the you know what hadn't impacted them and they weren't concerned!

And Dean and many other retired after they dropped the spousal subsidy and all of the warnings of doom and gloom had been presented. My wife and I are very good financial stewards as well and we are looking at the stock market right now and getting very concerned. I don't like what I'm seeing with the home mortgage meltdown that is occurring! We have been residing in the Twilight Zone for the past five years and we both continue to work to try and make sure we can survive. At our house we've already figured out that we will retire the day they plant us in the ground. Welcome to the new and prosperous America! Where were all of the voices when we were sounding the alarm? AWOL! Our problem wasn't their problem at that time. Note I said, I empathize but I have exhausted all of my pity! Sorry! When I got tired of fighting I just went back to work! I owe, I owe, so it's off to work I go, and ditto my wife!

For those who think it's better in Corporate America tell that to my wife. She has worked continuously for the past 43 years. When she had 36 years of service her company was acquired, a polite term, for raped and plundered, and she lost all of her benefits and was begrudgingly granted a paltry little pension after we acquired an attorney. No health insurance at all and the cost of a COBRA was more than her yearly retirement check. The grass is NOT greener on the other side for a majority of Americans and we can attest to that! We got screwed twice and as much as sex is supposed to feel good none of this feels good! What industry has my wife worked in during the past 43 years? Insurance!

In a few years I am going to suggest we hold a pity party at STRS for those who followed us out.

Duane