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Health and Security News
Health & Security opens new retiree drug plan

Tens of thousands of retirees were transferred on Jan. 1 into a new drug plan that will preserve and, in some instances, improve their coverage, said DC 37 Health and Security Plan officials.

While the transfer occurred smoothly for most of the affected retirees, the plan is addressing a number of problems that accompanied the change.

By covering Medicare-eligible retirees separately, the plan will be able to take advantage of significant extra Medicare Part D funding of senior drug plans under the 2010 health-care reform act.

"This is a win-win situation for everybody," said Plan Administrator Cynthia Chin-Marshall. "Cutting costs will reduce the financial squeeze on our standard drug benefit. Without this change, we would have likely had to increase co-pays or cut back on benefits."

On Jan. 1, more than 35,000 Medicare-eligible union retirees, spouses and dependents automatically began to receive their coverage for retail, mail-order and speciality drug purchases from the new DC 37 Part D Reitree Plan through UnitedHealthcare. Retirees who don't yet qualify for Medicare continue to receive the DC 37 benefit.

For the plan, the savings result from the federal funding and the administration by UnitedHealthcare's extensive nationwide network, including 65,000 pharmacies and a mail-order service, which means our retirees can continue to utilize their usual pharmacies. Thousands of brand-name and generic drugs are on the plan's preferred drug list.

The plan negotiated with UnitedHealthcare to ensure that retirees continue to receive the usual co-pays even when they hit Medicare's coverage gap, known as the donut hole. In other Part D prescription drug plans that are not fully insured, a participant would be responsible for 86 percent of the cost of generic drugs and 50 percent of the cost of brand-name drugs while in the donut hole. When a Medicare eligible participant goes into "catastrophic coverage" (over $4,700 in out-of-pocket costs) he or she is now required to pay 5 percent of the cost of the prescription drug. For example, if a drug costs $100, the participant will pay $5.

"The change is supposed to help preserve the benefits of members and retirees in the face of the relentless price increases imposed by pharmaceutical companies," said DC 37 Retirees Association President Stuart Leibowitz. "We have received complaints about the transition, and the association is working closely with the plan to address members' concerns and ensure that they are getting their benefits."

Some 2,000 retirees temporarily lost their drug benefit because they erroneously signed an opt-out form or their addresses or identification numbers weren't up to date. Another problem is that retirees with modified adjusted gross incomes over $85,000 weren't notified in advance that federal Medicare rules require them to contribute to their benefit. There is, however, a process under these rules where retirees can have this assessment eliminated if their income has been calculated incorrectly.

Members should call the plan's Inquiry Unit at 212-815-1234 if they have questions or problems with coverage. They may also contact UnitedHealthcare at 1-877-762-4096 from 8 a.m. to 8 p.m. seven days a week or go to www.UHCMedicareRxforGroups.com.

DC 37 members in the regular plan receive their medications from Prescription Solutions by OptumRx (the plan's prescription benefits manager).

More than 6,000 DC 37 retirees in HIP/VIP will not be affected by the change because that plan has its own drug benefit.

Late last year, Medicare-eligible retirees received an information packet about the plan, including a form for opting out to send to the DC 37 Medicare Part D Retiree Plan at 125 Barclay St., New York, NY 10007.

Retirees have complained that they didn't receive adequate notice. The plan had hoped to inform them of the change earlier, but it was unable to do that because contract negotiations did not conclude until the end of November.

The zero co-pay for generics does not apply to this program; however, some prescriptions are available for as little as a $2 co-pay. Low-income subsidies are also available to reduce or eliminate co-pays for many retirees with low qualifying incomes.