Public Employee Press

Your questions answered on new retiree drug plan

The DC 37 Health and Security Plan has received many inquiries about the new drug plan for Medicare-eligible retirees. The following questions and answers aim to address a number of concerns expressed by retirees in meetings and calls to the H&S Inquiry Unit:

Question: Why did H&S create the new DC 37 Medicare Part D Retiree Plan?
Answer: For years, constant prescription drug price increases have put the plan under tremendous financial pressure, making it harder to provide the benefit without imposing restrictions and shifting costs to members and retirees.

By covering Medicare-eligible retirees separately, the plan can use significant extra Medicare Part D funding for senior drug plans provided in the 2010 federal Affordable Care Act to hold down costs for members and retirees.

Question: Why didn't we receive better notice? I would have liked more time to review the new plan.
Answer: We needed to make a Jan. 1, 2012, deadline for the subsidies offered under the federal health-care act. Negotiations with UnitedHealthcare - the retiree plan's prescription benefits administrator - went down to the wire. We also had to comply with the requirements of the federal Center for Medicare Services (CMS).We were unable to communicate as early as we wished through the mail or the PEP.

Question: What are the improvements?
Answer: Although generic statins (cholesterol-lowering drugs) are no longer available for a zero co-pay, some prescriptions will be available for a $2 dollar co-pay, which is $3 less than the lowest co-pay in the regular plan for members and retirees who are not yet eligible for Medicare. Diabetes supplies are covered for free, and there are fewer restrictions on brand-name drugs. This Medicare Part D plan also does not have the "donut hole," a gap in coverage until catastrophic coverage kicks in.

Question: Why are some of us required to make a monthly payment for the plan? I was angry to learn that I was going to be charged for the new benefit.
Answer: The federal health-care act requires higher-income Medicare recipients to pay a surcharge. Individual seniors with modified gross incomes over $85,000 and families with $170,000 incomes must make contributions.

The typical DC 37 pension is less than $20,000, so we assumed none of our retirees hit the higher-income level. In addition, we did not know what other assets or income individual retirees or retirees and their spouses might have because the surcharge is based upon their prior year's tax return. Therefore, there was no way that we could have notified such high-income retirees in advance about the surcharge.

Question: Why did some people lose coverage? I received the information packet on the new benefit, but later I found that I wasn't covered.
Answer: A couple of thousand retirees temporarily lost their coverage because Medicare requires participants to provide their Medicare numbers to receive the benefit and Medicare Part D also doesn't accept PO Box addresses. Unfortunately, we didn't have that information from those individuals and their coverage was delayed until they updated their profiles. In addition, some retirees independently enrolled in a Medicare Advantage Plan and when their names were submitted to CMS, the enrollment in the Medicare Advantage Plan was temporarily terminated.