Monday, December 11, 2023

RPEC Weekly ACTION Newsletter – July 27, 2017

Healthcare Increases in Washington State

Today, the Public Employees Benefit Board (PEBB) approved premium changes for the health insurance plans they offer to Medicare eligible retirees“Where do you expect us to get the money,” asked one retired public employee when testifying.  The small room was packed with retirees asking similar questions.  8 retirees testified that a 20% jump in premiums for UMP was unacceptable.

While one plan decreased, the rest rose between 1.5% and 5.85% except from UMP Classic Medicare Supplement which rose by 20% or $55.51 per month.  A full list of the increases is can be found here.

RPEC members who turned out to express the serious financial hardship that this increase would inflict, and Gwen Rench, the RPEC member on the PEB Board and Greg Devereux, the representative for active employees, were the only votes against the resolution impacting UMP’s premiums.

The choice before the board was whether to approve the increase or lose the option of UMP for Medicare eligible retirees for 2018 completely.  “This is not an acceptable choice,” stated Devereux.  “We must look at alternatives.”

The major cause of the premium hike was the significant increase in costs for prescription drugs, in particular, specialty medications.  They reported that while they have leveraged the purchasing power of their over 300,000 participants and utilize a prescription drug rebate program and cost management plan, it is not enough to mitigate the increases.

The UMP Classic is the only plan administered by the HCA, and the only option outside of a Plan F, which is not a Medicare Advantage plan.  It therefore is an important option but the continued increases in costs are unsustainable.  The Office of the Insurance Commissioner (OIC) reports that the counties who DO NOT have Medicare Advantage coverage have increased from 7 in 2016 to 10 in 2017.  In addition, the OIC is specifically forbidden by federal law from regulating Medicare Advantage plans, of which only 1% have been regulated by the federal government according to a report by the Government Accounting Office (GAO).

Something’s Gotta Give:  The meeting included passionate appeals from the audience, and many board members acknowledged a need to change the status quo.  “We cannot allow pharmaceutical companies to continue to reap record profits on the backs of retirees,” said Denny Johnston, president of the Olympia RPEC Chapter.

The Board discussed having a meeting this fall, instead of waiting till January, to try to address the issues raised.  PEBB staff also brought up examining ways to adjust the formulary to keep prescription drug costs down, which RPEC will be reviewing.  In addition, PEBB staff says that the state will need to increase their subsidy for Medicare eligible retirees by 2019 if they want to maintain the $21 million matching dollars from the federal government.  This is one of the legislative priorities for RPEC.

More information will be forthcoming.


The U.S. Senate and Healthcare 

Earlier this week, the Senate voted 50-50 with a tie-breaking vote by Vice-President Pence, to proceed with debate on healthcare. Since then, it’s been a whirlwind of proposed bills and amendments meant more to achieve campaign promises and provide tax relief to the wealthy, than to better healthcare for the average hard-working American.

To recap what has happened this week so far:

  • Tuesday – the Senate voted 50-50 with a tie-breaking vote by Vice-President Pence, to proceed with debate on healthcare.
  • Tuesday – the Senate majority’s bill (the Better Care Reconciliation Act, BCRA) failed in a procedural vote 57-43
  • Wednesday – the Senate failed to pass a full ACA repeal with a 2 year stipulation to replace by a vote of 45-55.
  • Thursday – the Senate is poised to vote on a “skinny bill” which will rollback the ACA individual and employer mandates. If this were to pass, the bill would be sent to a conference committee where members of the House and Senate could quickly hash out an agreement that could be sent back to both chambers for a quick yes-no vote.

RPEC is still very concerned about the impact of these proposals on Medicare and Medicaid.  Needless to say, the healthcare status is quite fluid right now and we will continue to monitor progress.


The U.S. House and the Budget

The House majority budget resolution is finally headed to the floor for voting, but that will not take place until September, after their August recess.

The House budget resolution would dramatically reshape the federal government with cuts to mandatory programs and pave the way for a major overhaul of the tax code.

This budget proposal partially privatizes Medicare and deeply cuts social programs.  It also calls for $4.4 trillion in cuts over 10 years to Medicare, Medicaid, food stamps, unemployment insurance and other social programs.


It slashes safety net programs. Like the Trump budget, the House budget would slash Medicaid — it says that via Medicaid cuts plus changes to Obamacare, it would save $1.5 trillion. And the House budget would also impose work requirements on Temporary Assistance for Needy Families (known as welfare) and the Supplemental Nutrition Assistance Program (known as food stamps). 

It also cuts Medicare. The House bill would cut Medicare by $487 billion over 10 years, while the president’s budget, as proposed, barely touched it. 

It would ramp up military spending while slashing other discretionary spending. The House budget would bump up defense spending by around $929 billion over the next decade and save on non-defense discretionary spending by $1.3 trillion. Broadly speaking, that’s similar to the White House budget as proposed in May.

The House budget ultimately plans for trillions of dollars in mandatory spending cuts, but in the near term, it calls upon 11 committees to cut $203 billion altogether over a decade. So, for example, the Committee on Education and the Workforce will have to cut $20 billion over the next decade. And the Ways and Means Committee, which has jurisdiction over a variety of spending programs like Temporary Assistance for Needy Families, would cut $52 billion over the next decade.


Plan 1 COLA/Select Committee on Pension Policy

The SCPP addressed its goal to “Increase and Maintain the Purchasing Power of Plan 1 Benefits” at its July meeting.  RPEC member and past president John O’Brien testified to the great need for a COLA and requested that the committee take action.  RPEC is working to provide several options for discussion for the September meeting.


Social Security 2018 COLA

Social Security beneficiaries are projected to receive a 2.2% cost-of-living increase next year, the most since 2011. The bad news is that it is generally expected to be offset by an increase in the Medicare premium.

The Social Security COLA is not meeting its prescribed goal of keeping up with inflation.  The Senior Citizens League’s published a study that found that Social Security beneficiaries have lost nearly one-third of their buying power since 2000, and they have lost 7 % just over the past 12 months.


As you can see, we have much work to do in the weeks and months ahead to continue the betterment of your retirement security. Your continued support and political action is a necessity!

Your Voice for Retirement Security!

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