From Nancy Hamant: A Medicare Advantage Example

Nancy Hamant to Dave Parshall, September 15, 2007
Subject: Medicare Advantage Example--Edited

MEDICARE ADVANTAGE EXAMPLE

The husband dropped out of her SERS plan two years ago due to the increase in monthly premiums for spouses. He joined a Medicare Complete Plan (One of Ohio's Medicare Advantage Plans). His monthly premium was greatly reduced. All was fine for two years, then he had to have full knee replacement surgery this past June. He previously had partial knee replacement surgery (on the opposite knee four years ago) under the SERS insurance plan. He quickly found out that he was responsible for much more of the Hospital bill under the Medicare Complete plan (Advantage) and he also found out that he had to pay a significant co-insurance cost for the required therapy. His solution -- he stopped therapy after one month, convinced he could do it at home on his stationary bicycle and doing "step therapy." Three months later, he has had so much pain and has been on pain-killers for this entire time that all his doctors are appalled. His upper thigh muscle has deteriorated to the extent that he is now ordered to have therapy three times a week (rather than the initial two times) to correct the muscle loss, and he has had the pain medication reduced to a less potent drug for three weeks so that he can now use Aleve. He is fortunately able to get Tier 2 medications through VA as he cannot afford the Medicare Complete costs. Also, he is still thinking about only going to therapy two times a week, as the co-insurance for therapy is still costing thousands.

His wife just received her annual enrollment package from SERS regarding her insurance plan for next year. Her monthly premium for 2007 is $88 a month; her monthly premium for 2008 will be $58 a month -- she is thrilled about that drop in premium. SERS stated that she will be "automatically" enrolled in the new plan (which as STRS staff stated is a Medicare Advantage Plan. Also, in the SERS plan information on their website, which was circulated by CORE, SERS clearly states that if SERS member does not accept the Medicare Advantage plans provided by either Aetna or Med Mutual, no other options are available). She did not have any information as of yet as to any changes in coverage, annual deductibles or co-insurance. So basically, many SERS members will be very happy with the monthly premium reductions, but at this point have no idea as to what will happen when they have to use the plan.

The STRS Medicare Advantage Plan considered was to be only in five counties. STRS's Sandy Knoesel said that STRS staff struggled with making any recommendation to the STRS Board due to the "poor track record" of Aetna and Med Mutual's Medicare Advantages' plans. However, the STRS staff said that Aultcare's record for the five counties was much better, so the STRS staff recommended that it be considered as a "pilot" plan. After much discussion, the STRS Board voted against including a Medicare Advantage plan as the five county situation could not be replicated anywhere else in Ohio.

Also, the September issue of Consumers Report stated that a Medicare Advantage Plan should only be considered by anyone after a complete comparison of the person's current medical plan to the Medicare Advantage Plan be completed by a qualified insurance consultant.

So, it is evident that the SERS members will serve as a "pilot" for all five public pension plans to critically observe and monitor whether or not Medicare Advantage Plans are appropriate options for Ohio's public pensioners.

Nancy Hamant