Hanford retirees switched to health reimbursement plan

About 5,500 Hanford retirees and spouses are being switched to a new health insurance program that shifts responsibility to them under a health reimbursement arrangement.

"You will now be responsible for choosing and paying for your own health coverage," said a letter sent to retirees eligible for Medicare from the Hanford Employee Welfare Trust, or HEWT.

Retirees and spouses each will receive an $1,800 annual subsidy toward medical and prescription drug coverage through a tax-free "health reimbursement arrangement."

HEWT, which administers the retirement benefits for Hanford contractors, has struggled to contain soaring health care costs without sacrificing quality or coverage for retirees, it said in the letter.

The new program should allow most participants to pay less for the same health care coverage to supplement Medicare next year, according to HEWT. In addition, they now will have the option to purchase dental and vision insurance.

But retirees are leery, concerned that their costs will go up and that the new system will be too confusing for the oldest retirees to navigate.

"We have a whole group of retirees who are very upset," said Gene Turner of Richland, who retired from Hanford two decades ago. "They do not know if they are going to get the same insurance or the same price."

Meetings are planned this week in the Hanford area and each retiree will be scheduled to talk by phone with a representative of the new program before the first of the year.

In the past retirees have picked between plans offered by Group Health and United Healthcare. Now they'll pick from a range of plans offered through the Extend Health Medicare exchange.

When the letters were sent to retirees, they were directed to a website to evaluate options. It listed available insurance plans by ZIP code. For those in Benton County it listed Medigap plans only from Mutual of Omaha.

But Extend Health still is pulling together the most competitive plans, said Joe Murad, a senior vice president of Extend Health. A list provided by Mission Support Alliance listed AARP, Asuris Northwest Health, Humana, Regence Blue Shield and SecureHorizons in addition to Mutual of Omaha as medigap providers for Hanford retirees in Benton, Franklin and Yakima counties.

In addition six companies will offer Medicare Advantage programs in the Hanford area. Medicare Advantage programs generally require retirees to stick with networks of approved care providers or face higher costs.

Turner said after two lengthy phone calls, a Mutual of Omaha plan was recommended by Extend Care as offering similar benefits to what he now receives. He figures his costs will go up, he said.

He's concerned that particularly those retirees in their 80s and 90s may be swayed in phone interviews scheduled to set up coverage and will buy something they don't want, he said.

The Washington State Office of the Insurance Commissioner says Hanford retirees can call its Statewide Health Insurance Benefits Advisors, or SHIBA, helpline at 800-562-6900 and ask to talk with a SHIBA volunteer in their area to help them understand their options.

The $1,800 that retirees receive in reimbursement can be used to cover premiums for Medicare supplemental insurance, deductibles or co-pays, and dental and vision plan premiums.

Retirees have been telling HEWT that they miss having dental insurance, said Heather Goldie-Baker, manager of benefits administration for HEWT. Through Extend Health they can choose dental coverage for $45 a month and vision coverage for $168 a year in the Hanford area, both of which are new for Hanford retirees on Medicare.

The new system also will have benefits for retirees who have moved out of the Northwest, she said. In the past they had to pick the United Healthcare option because Group Health was not offered nationwide. The new health reimbursement arrangement should give them more options.

About 69 percent of Hanford retirees on Medicare live in the Tri-Cities and 85 percent live in Washington state.

According to the Employee Benefits Research Institute fewer retirees nationwide are being offered retiree health benefits. In 2008 the percentage of 65- to 69-year-olds receiving health benefits in retirement dropped to 26 percent, down from 32 percent in 1994. The numbers are lower for older retirees.

* More Hanford news at hanfordnews.com.