Lanesborough Retirees Weigh in on Health Insurance Proposal
LANESBOROUGH, Mass. — Town retirees say they were one of the first to agree to move to Medicare when few were doing that.
They don't receive any additional reimbursement as available in other towns and, at age 65, health insurance premiums jump by some 30 percent, according to Charles Oranellas, a former member of the public employee committee. The move to the federal Medicare program saved the town by reducing its contributions toward health care because the federal government took over the majority of the cost.
The Board of Selectmen are now looking to up the percentage retirees pay for their health-care plans to capitalize on an expected reduction in Medex premiums. Oranellas says that isn't fair.
"I understand that measures to reduce the cost of health insurance may be necessary; however, the devil is always in the detail and we ask the board not to overreach. Retirees only seek fairness and objectivity in dealing with the health insurance budget just as they would with any budget," Oranellas wrote to to the Board of Selectmen, which was read by Kevin Dowling.
"Ironically, the retiree portion of the entire health insurance budget is relatively small in light of the 20 percent reduction in Medex that the town will save. Retirees are not the problem. In fact, we can be part of the solution as we have proven in the past."
Oranellas said retirees under age 65 pay for the plan offered by the town and then switch to Medicare and Medex. However, for a couple, the change means paying a single premium under the family plan to paying two individual premiums for Medicare and two additional premiums for the supplemental Medex plan. And not all retirees qualify for the Medex plan.
Ken Mello is disabled now and doesn't have the additional plan for which the savings could help offset the increase in percentage. He said a 5 percent increase would be difficult for him at at time when he needs health insurance the most. That 5 percent increase would be on top of a 17 percent increase retirees paid because of rising Medicare premiums.
"I never got 40 quarters. Now that I am disabled, I can't go out and get a job to get the 40 quarters to go to Medex," Mello said.
Dowling estimates even the cheapest plan would see an annual premium increase of some $400. For families, that number grows.
Town Manager Paul Sieloff proposed the idea in February when presenting his fiscal 2017 draft budget. Sieloff says a fairly recent court case has shown towns have the authority to change the split for retirees without negotiations. The split can drop to as low as 50 percent.
"The number we've come up with is somewhere between $100,000 and $135,000 if we were to drop it to 50 percent," Sieloff said. "That would be a number we take right out of the budget."
The town spends $1.4 million on health insurance for both employees and retirees, a number that represents about a 10th of the total budget. Sieloff says by reducing the split, retirees would see little change because of the drop in Medex premiums, while saving the town money. Sieloff estimates the change in the split could cut the tax rate by 25 cents.
Mello, however, responded saying "the tax rate isn't magic money. It comes from people living on a fixed income."
Retirees are paying 15 percent of the premium cost — with a small number paying 10 percent — and active employees are paying 20 percent. Retiree Jane Shiyah said those splits were negotiated and it sends the wrong message for the town to renege on its agreement.
Those retirees who came before the board on Monday said they aren't necessarily asking to keep the splits exactly as they are but they are asking for a seat at the table. Oranellas' letter suggested reconvening a PEC or an insurance advisory committee to help guide the town before a decision is reached.
For Sieloff, putting together a group means delaying a decision. He's hoping the board will make a determination on the split in the coming months so he can factor that into the budget and realize the savings from the Medex decrease.
"There is a benefit to doing that now because of the end of the fiscal year, because that is when the rate is going to drop, on July 1," Sieloff said.
The Selectmen had previous been split in their opinions on the matter and the response from retirees made that decision even more difficult. Chairman John Goerlach suggested working on changing the health insurance splits for all employees — union, non-union, and retirees — to "take a little bit from each of them to help the cost."
"It is going to take a few months to talk about. I would be reluctant to make a decision on this. It is a pretty important thing for a lot of people," Goerlach said.
Tags: fiscal 2017, health insurance, medicare/medicaid, retirees,
