Retirees: Benefit changes unfair
Retirees complained Friday that changes to the Public Employee Benefits Plan are unfair to those who have already retired.
The plan budget has already been closed with those benefit reductions included. The Assembly Ways and Means Committee was hearing the policy bills that implement the necessary changes to how Medicare eligible retirees are treated.
The plan basically removes Medicare eligible retirees from the state benefits plan, moving them to a Medicare Exchange program designed to get them benefits through the private sector. While it doesn’t eliminate the historic subsidy for those workers, it cuts the amount by more than half from more than $400 a month for those with 20 plus years of service to a maximum of $200.
“You’ve created two classes of retiree,” said Roger Bremner. “I would argue there’s a vested right for retirees to get a subsidy.”
Bob Johnson of the Retired Public Employees of Nevada said changing the benefits after a person retires isn’t right.
“I would argue there is a vested right for retirees to get a subsidy,” he said.
And he charged that treating Medicare retirees differently is discrimination.
Assembly Bill 562 provides for the transfer of Medicare retirees to the Medicare Exchange. Assembly Bill 563 sets the state’s contribution for active workers, state retirees and, for the first time, a lower subsidy for Medicare eligible retirees.
Benefits Plan Executive Director Jim Wells said the changes will save the state $18.8 million during the biennium.
Jim Richardson of the Nevada Faculty Alliance said unlike some retiree groups, the people he represents will support the plan.
“My group has decided that, on balance, this plan is better than some of the alternatives that have been offered by some governors and commissions,” he said referring to the SAGE Commission which recommended cutting Medicare eligible retirees off.
Marty Bibb of the retired public employee group said it’s better than being cut off, which more than one state has done, but that it is a large difference.
“The question is what will it buy,” he said.
He said there is a lot of uncertainty among retirees about the Medicare Exchange and what it will actually provide and how it will work.
Dan Aalbers said his parents, former teachers, will be seriously impacted by the move to private coverage. He said his mother has “a very rare disease” and only one company makes the drug that treats it. He said the best scenario will cost them $1,000 more a year, the worst, $34,000 more a year.
The legislation sets the state subsidy for active employees at $645 a month next year and $733 a month in 2013. For state retirees, the subsidy is $418 and $473 a month.
For Medicare eligible retirees, the subsidy would begin at $50 a month and rise to a maximum of $200 after 20 years service.
Richardson asked the Ways and Means members to consider a trigger that would raise that subsidy amount if it’s determined there is excess cash available in its reserves – which happened this past year because claims were less than what was budgeted.
“Every dollar helps,” he said. “Some of these folks are right at the edge.”
Wells said he doesn’t believe so many are confused and opposed to the Medicare Exchange plan. He pointed out that more than 7,000 of the 11,500 state retirees eligible for Medicare have already signed up with a private provider through the exchange. He added that there have only been 150 complaints about the process.
The committee took no action on the measures, which must pass in order to implement the budget already approved.