Current STRS Asset Value

From Mario Iacone, August 31, 2012

CURRENT ASSET VALUE as of 7/31/2012..........64 Billion

ASSET VALUE as of PREVIOUS MONTH 6/30//2012..........63.8 Billion

ASSET VALUE as of APRIL 30,2012..........65.2 Billion

HIGH ASSET VALUE....2007
..........approx 80 Billion

LOW ASSET VALUE...early 2009
..........approx 47 Billion

START of CURRENT FISCAL YEAR
..........approx 66.2 Billion

approx 16 Billion BELOW 2007 HIGH and
approx 17 Billion ABOVE 2009 LOW

Kay Fluke's extemporaneous speech to the STRS board August 16, 2012, reconstructed by RH Jones

Legislators Not Acting Fairly Regarding the House Pension Changes

Today I am 25-years in the retirement with the STRS and I have pleasantly enjoyed a 3% COLA for every one of the 25-years, and 13th checks. Many things here I have enjoyed and I appreciate that. Now I see ourselves looking at our COLA and doing some things that is perplexing to me. One thing is this: I looked at our Akron Beacon Journal in Akron 'Summer Pledge' and they are saying, 'why are we waiting 3-years to get something done setting here in the House'? And they are taking to task William G. Batchelder, who is Speaker of the House saying 'Let's move, let's do something'.

Well when I read that over, that was published in July 13, and right after I sent in a letter to the editor, which you have right in front of you. And the editorial, July 13th indicates the House Speaker promises to update pension changes, after a long delay. In 2001, the legislators, some legislators still there right now, passed the {bill} requiring the 5 retirement systems to pay a 3% annual COLA to retirees regardless of the cost of living retirement. It was put to the ORSC; and, I might add, they agreed with it. They were the ones looking at this and made pronouncements.

Right now, the new bill, proposed now, the retired teachers will not receive a COLA in a bill that provides that this may be revised in the future; which I am very skeptical about. Compare this with PERS, I went through PERS and I checked everything - their comments coming from people. What they think about the COLA: they are practically unanimous. They want to keep that 3% COLA.

I looked at SERS and they are also in there to get that 3%. Then, if we look to the police/fire, that is very interesting because they are getting a 3%, but the 3% is compounded - we are just asking for a simple. A teacher who retired with the understanding of a 3% COLA will be deceived, and will be deception, and possibly be unethical, if this HB passes in present form. They went into retirement through counseling, the idea of getting this through {the HB already on the books} bill of 3%. And now they are trying to do this thing with the COLA.

Long retired teachers will not have a form of COLA. And they will see their STRS retirement system support fall the first time in 80-years. I call your attention to the 75-year book -- the 75-year history book of the STRS -- and what impressed me was there were men teachers. I call your attention to a woman; one in particular who said: 'I am so dedicated to the STRS because you have given me a COLA so I can maintain my retirement in good standing as I move forward'.

This article that I had in the Beacon, and I will conclude right now, 'Our system is sound'. If it is sound, why do we need all these changes? And I might, also, add, it was in Yahoo mail. What caught my attention was that this calls for no COLA in 2014. What happens if we do not get a 2% in 2013? What about this 2014? I do not know, maybe a misprint? I am not sure but, anyway, it said 2014. But this is what may be a misprint. But anyway, this is what makes me very cautious to give you control of changing this for all of us because we may be 'going down the tube'. We may not be moving ahead, and this is unfortunate. I thank you for your time.

Greg Nickell responds to Shirlee's questions re: health benefit changes for 2013

Greg Nickell to Shirlee Zerkel, Aug 30, 2012
Subject: RE: Health Benefits Changes for 2013

Dear Ms. Zerkel:

Comments to your questions are below.

1. Am I understanding this correctly that now there will be a difference for in and out of network providers?

Yes. In 2013, it impacts individuals enrolled in the Aetna plan who live in a county approved by Medicare to be an active Aetna PPO county. In Ohio, all counties are active Aetna PPO counties except Ashland.

a. How is this different from 2012?

For individuals living in an active PPO county, the annual $500 deductible is applied to all services for out-of-network providers except for preventive, urgent care, emergency room and emergency transport services. There is also a $40 out-of-network physician office visit copayment that applies after the $500 deductible is satisfied. Other out-of-network services that will be subject to the annual $500 deductible in 2013 include services such as allergy testing/treatment, outpatient laboratory, skilled nursing, home health care and podiatry.

Currently, there are in-network services such as inpatient hospital/mental health/alcohol/drug, physical/occupational/speech outpatient therapies, durable medical equipment, X-rays/radiology and chiropractic already subject to the annual $500 deductible. These are unchanged for 2013 as they will continue to be subject to the annual $500 deductible in 2013 for both in- and out-of-network services.

b. Will this also be true for providers who may read our x-rays and other tests?

For individuals living in an active PPO county, if you see an out-of-network provider you would be responsible for providers who interpret X-rays and other tests. If you see and in-network provider, that provider is responsible for seeing that all other subsequent provider activity be done by other in-network providers. In this instance, if any out-of-network providers subsequently deliver services, the in-network provider is responsible for the difference in costs and you will receive the in-network level of coverage.

2. Has STRS ever covered Tier 3 and 4 drugs 100%?

Yes. Currently, enrollees have a 50% coinsurance for Tier 3 drugs to a maximum of $100 at retail and $200 at home delivery and a 100% coinsurance for Tier 4 drugs. All Tier 3 drugs have either a generic available (most cases) or a therapeutically equivalent Tier 2 brand drug in the same drug class used for treating the same diagnosis. Tier 4 drugs are drugs such as those used to treat male baldness, erectile dysfunction, non-sedating antihistamines and over-the-counter allergy medications.

a. Does this mean that we will have to pay 100% for many drugs for very serious illnesses?

No. First, anyone currently taking or if their physician prescribes tier 3 drugs in 2013 has the right to appeal through their treating physician. Secondly, for certain individuals taking tier 3 drugs where there is often high sensitivity to change in drugs like multiple sclerosis will be grandfathered and will pay the brand copayment. Express Scripts is in the process of notifying anyone being impacted by these changes. The information will include the covered alternatives available under next year’s plan. The conservative estimate is that at least 75% of patients taking Tier 3 drugs will change their prescription to a generic or Tier 2 brand drug that reduces their copayment costs compared to this year.

b. Will Express Scripts now move many of our drugs to tier 3 and 4?

No. Only drugs that have generics or therapeutically equivalent covered preferred brand would become no longer covered. In 2013, there are less than 120 drugs moving from covered preferred to not covered.

People living in active Aetna PPO counties who have utilized out-of-network providers in the last 12 months and anyone currently filling prescriptions that will not be covered under the plan next year will receive mailings with specific details well in advance of Jan. 1 2013 and before this year’s open enrollment which begins Nov. 1.

Hopefully this answers your questions.

Sincerely,
Greg Nickell
Director, Health Care Services
State Teachers Retirement System of Ohio

Shirlee Zerkel: Questions for Greg Nickell re: STRS Coverage

Shirlee Zerkel to Greg Nickell, August 23, 2012
Subject: Health Benefits Changes for 2013

Dear Mr. Nickell:

I e-mailed you Tuesday with the following questions and am wondering if you received it or maybe you are on vacation.

Thank you for your last response to me. Now I have more questions. I noticed in the STRS News that some changes will occur for 2013. Am I understanding this correctly that now there will be a difference for in and out of network providers? How is this different from 2012? Will this also be true for providers who may read our x-rays and other tests? We have no control in selecting such providers.

Has STRS ever covered Tier 3 and 4 drugs 100%? Does this mean that we will have to pay 100% for many drugs for very serious illnesses? Will Express Scripts now move many of our drugs to tier 3 and 4?

Thank you,
Shirlee Zerkel