Changes in works for non-Medicare Part A qualifiers
The Ohio Public Employees Retirement System Board of Trustees has taken action to help retirees who do not qualify for Medicare Part A at no cost to join the upcoming OPERS Medicare Connector.
The Board recommended that OPERS staff pursue changing the section of Ohio Revised Code that defines how the system provides insurance to retirees over 65 but who were never given the opportunity to pay into Medicare Part A hospitalization coverage throughout their careers. Under the new plan, OPERS could reimburse the Medicare Part A premiums for retirees who cannot participate in Medicare Part A for free. These retirees would then be eligible to select health coverage through the Connector and receive an applicable allowance.
You can click here to watch a video in which OPERS Health Care Director Marianne Steger explains the proposal.
The Board took this action after an overwhelming demand from our retirees who do not have Medicare Part A that they somehow be allowed to participate in the Connector. These retirees realized that without the option of the Connector they would see their health care costs increase by $300 a month in 2018 when the health care changes are fully implemented.
Because Ohio law requires us to provide a health care plan to the approximately 6,500 affected retirees, state legislators would have to amend the applicable statute for the plan to take effect. OPERS will seek input from these members and retirees before approaching legislators to change the law.
Under the new plan, OPERS would reimburse 100 percent of the retirees’ Medicare Part A premium as well as any surcharges for late enrollment when the retiree enrolls in Medicare Part A and selects a plan through the Connector. OPERS also would reimburse a portion of the premium for retirees’ spouses, as well as any applicable surcharges.
Spouses also would receive an allowance in 2016 and 2017 after selecting a plan through the Connector and no Connector allowance beginning in 2018, just like all OPERS spouses. They would continue to receive the portion for reimbursement for the Medicare Part A premium and surcharge.
We project that creating an avenue for these retirees to use the Connector will create $1 million in savings for OPERS from 2016-2028 based on the current plan compared with the proposed plan.
The reason for the change is that retirees who don’t qualify for Medicare Part A at no cost would have the highest increased health care costs of all OPERS retirees without the Connector – about $300 per month. That’s because by 2018, when the allowance transition is completed under the new health care plan, these retirees would be paying $203 more monthly in health care premium. They also will lose the Medicare B reimbursement, currently at $96.40.
The average OPERS monthly allowance under the Connector will be $337, which we’ve stated could cover the most-popular Medigap plan, drug coverage and the Medicare Part B premium.
The plan also would benefit OPERS. This covered group will gradually decrease in size. As that happens, their premiums likely will rise. That could result in adverse selection – with healthier retirees dropping out of the plan, making it more likely that the claims risk would increase, a risk that OPERS would have to bear.
Michael Pramik
Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.
This is great news! Thank you very much OPERS Board!
I am very happy to see this, with losing spouse coverage we will need all of the help we can get.
Sounds great! Thanks much to everyone who has been working on it and looking out for our group.
This is the first thing for me not to loose sleep for my health coverage. Now looking forward to spouse under 65 and / or over, for their coverage beyond 2018. Thanks
Assuming you are able to change the law so that we can use the connector, will we also get the approximately $337.00 allowance on top of the Medicare part A reimbursement?
Retiree,
Participants will receive the applicable allowance amount. An overwhelming majority will receive $337 monthly.
–Ohio PERS
This is a great step forward, however it still needs a lot of tweaking. How is the premium eligibility for spouses going to be determined? With regular Medicare A, if the worker is eligible for free coverage, so is the spouse. Why would my spouse only be covered at 50%? Anybody that worked a job for 30, 40, years wants the same coverage for themselves and their spouse the government would give to folks that worked that long, whose jobs HAD paid in. Not paying into Medicare wasn’t our fault, and we and our spouses should be qualified for equivalent, FREE Medicare A like everyone else.
Alexander,
Ohio law requires us to provide some type of plan for Medicare A non-qualifiers and their spouses, and that’s what we’re doing. Recall that OPERS is completely eliminating allowances for all spouses by 2018. And don’t forget that those workers who did not pay into Medicare Part A had more take home pay for decades than those who did.
–Ohio PERS
It was not our choice to not pay into Medicare. The take-home pay comment has no relevance in this discussion.
Yes, and OPERS is thanked for that recognition. AFA the elimination of spousal support for those near or in retirement–that was just wrong, period. Especially since it seems the ACA won’t let them get any subsidy through them either. It is also true that we had more money in our paychecks, although a vast majority of us paid into our retirement, (and THOUGHT we were paying into healthcare for us & our families) we would gladly have paid into Medicare if we’d had a CHOICE. The “extra” paycheck money does not compare to having healthcare we can count on for ourselves and our spouses like Medicare does. Non-qualifiers… It almost sounds like we failed to do something on our part, and we’re getting done a favor. All the years of working, and thinking healthcare was taken care of…
Don’t get me wrong, Mr. Pramik. This plan sounds great for us retiree’s. I am just worried about my wife. I’m one of those guys that wants to make sure everything is OK for her if something ever happens to me. It’s very upsetting that as soon as I retire, everything goes haywire. I really just think people already retired are going to have a lot to adjust to, and it doesn’t seem fair, because some of us might have made different decisions earlier on.
Exactly correct, those of us that worked 30-40 years under Opers expected to be taken care of during our retirement, that includes our spouses. Our family is old school, I worked amd my wife raised the kids. We deserve the same coverage as those under Soc. Sec./ Medicare. Our choice was to work in the public sector for the people livng in this state, help us now to live without worry in our retirement years. Not at 50% coverage for Medicare A, but 100% for lives, not for a few years.. get to the State Legislature and this taken care of. Also no penalty for us signing up
late for Medicare A.. State ..talk to the Feds, we deserve the coverage.
With 36+ years in, I have been basing my decisions on the Charts 1, 2 and 3 in “Comprehensive Guide to Pension and Health Care Changes (Revised March 2013).” Now, it appears that is out the window. The “Retirement Planner Tool” does not seem to correspond to those charts, and this article implies both are wrong.
With the end of the year closing in, retirement is becoming an urgent question, and the available information is confusing.
Two basic, general questions:
A) Do the charts mentioned above still apply?
B) What are the differences for coverage for non-Medicare employees before and after age 65?
Spain,
Yes, the charts still apply. However, they show the ending percentages in 2018 and beyond.
And we will continue to sponsor a plan for our non-Medicare retirees. Once a non-Medicare retiree turns 65, he or she will be eligible for their Health Reimbursement Account allowance by purchasing a health care plan through the Connector. You cannot remain on the non-Medicare plan if you are 65 or older, even if you do not apply for Medicare.
–Ohio PERS
Thank you so much. This has been a great concern to me. Is there anything we can do to support this measure?
Mary,
There may be in the near future. We are planning that step in the process and will communicate any such opportunities through our blog and other means.
–Ohio PERS
I have had may retiree who have been upset by not having access to the connector I tink this would have our retirees very Happy
It appears to be good news for somebody like me who never was eligible for Part A even though I would have liked to contribute toward it starting years ago. If it turns out that the proposed change by OPERS is implemented, I would like something else included: that everything be covered for Part A so I pay nothing. When I became eligible for Part B, I recall that I had to come up with a double payment when I first started. I do not remember the reason , but I do not want to have to be responsible for any double payment at the beginning of any Part A coverage. Without the proposed changes by OPERS, I am not sure how I could pay so much for premiums in the future. Still, I have been somewhat comfortable with the Humana Medicare Advantage Plan that I have now and into 2015. I like to continue to pick my doctor and I have liked having Express Scripts when my medications have been approved. With Humana, I have always been able to reach somebody easily for help and questions. With any connector, I want easy access to efficient and expert people for great advice and guidance.
Thank you OPERS. When I began working in 1971 I had no concerns about Medicare A or the taxed/not-taxed Employee Contributions (Box 5 of 1099-R). It now appears we will be part of the Medicare Connector.
What is a Medicare A non-qualifier? Does this mean those of us who have not signed up for Medicare because we were told we did not have to as long as we had State of Ohio employee insurance, which was as good as or better than Medicare?
Mercy,
We are referring to “non-qualifiers” as those who became a public employee before April 1, 1986 and have never had the opportunity to pay into the Medicare Part A insurance program.
–Ohio PERS
Do you mean 4/1/1986?
John,
Yes. We did make that change to the previous answer. Thanks.
–Ohio PERS
This new arrangement is not fair to the other retirees.
This problem could have been avoided if the state of Ohio had originally opted to cover its public employees under Social Security. Other governmental employers opted to do so, many years ago. For example, the City of New York, which employs a larger workforce in its civil service, than does the state of Ohio, covered its employees under both Social Security, as well as its own pension plan.
Just a few questions. I was a non-Medicare employee.
How are non-Medicare employees who have turned 65 currently provided for? I have not reached 65 so I do not know. Do these individuals currently pay a Medicare part B?(I know that there is still some reimbursement for Medicare part B, but what I am asking is “are non-Medicare employees required to currently pay a Medicare part B cost if they do not participate in Medicare?” If they do not pay a medicare part B payment, why would it be relevant to non-Medicare employees in an analysis of what they will be required to pay. It would only be relevant under a Medicare plan.
Is this plan for non-Medicare employees who have reached 65 to participate in a connector a done deal? This “overwhelming demand” you speak of, how was this measured? Was there a survey I missed.
And if you are saying that non-Medicare retired employees would be part of a Medicare connector, wouldn’t all the rules that pertain to Medicare covered individuals necessarily apply then to non-Medicare employees and their spouses? (50% for spouses is okay under federal Medicare)
Tischer,
Currently OPERS sponsors a plan, according to Ohio law, for those members who are of Medicare age but did not qualify for free Medicare Plan A coverage on their own. The plan is nearly a “done deal,” and we had nearly 3,700 responses from our members asking for it. Look for a blog to be published very soon on this subject.
As for your last question, we are not saying that non-Medicare employees will suddenly be treated like Medicare retirees. Non-Medicare retirees will not be able to use the Connector, because it does not offer pre-Medicare plans. We are making sure that those who can be enrolled in Medicare Parts A & B will become full Medicare retirees and use the Connector. Only those individuals who do not qualify for Medicare Part A with no premium will be eligible to have the Medicare Part A premium reimbursed by using the Connector.
–Ohio PERS
My husband and I are both OSU retirees and are quite worried about health coverage without the Medicare connection. We are placing our faith in the OPERS staff to make sure that we are not forgotten.
We don’t have a lot of faith in the legislature to act in a timely manner.
When do we sign up for Medicare Part A and when do you reimburse us for the premium.
Danny,
When any decision has been finalized regarding the Medicare Part A proposal, we will have many more details to provide.
–Ohio PERS
Pingback: Deadline approaching for health care coverage | PERSpective
If my spouse has paid medicare tax through her job, would that make me eligible for free medicare part A? She is still not 65 years old.
Jim,
That’s a good question for the Social Security Administration: 800-772-1213.
–Ohio PERS
Pingback: Legislature OKs measures for members, retirees | PERSpective
I never paid into Medicare part A ,because of being a public employee and not being required to.
On July 10,2016 I will turn 65 and I am concerned as to what my health insurance situation will be.
Can you supply me with some much needed information? Thank you.
Ronald,
Please refer to this video that we recently recorded for more information:
https://perspective.opers.org/pensions/how-non-qualifiers-can-secure-connector-coverage/
Members of this group won’t be able to sign up for Medicare until July 1, 2016. We will hold educational sessions in early 2016 and are planning much more communication to you in the future.
–Ohio PERS
How will a non-Medicare part A employee be affected for 2022 changes? I worked for over 31 years and am presently 75 years old. Will I still get from 98 to 90 percent of the Medicare reimbursement that I will paying at 2022? I can’t find any information on my situation.
Phyllis,
OPERS will continue to reimburse Med A.
Julie