Gov. Phil Scott’s plan to save money by moving retired state employees to a new private Medicare plan has enraged public employee unions and Democratic lawmakers are vowing to block the effort.
The administration says moving more than 6,000 retirees to a new Medicare Advantage plan could save the state $9 million, reduce premiums for retirees and reduce the system’s long-term liabilities.
“It seems like a win for everyone,” Scott said Tuesday at his weekly news conference.
He noted that retired teachers and employees of state colleges have switched to private Medicare insurance programs. “I haven’t heard any complaints from them,” the governor said.
But the Vermont State Employees’ Association has opposed the idea since the Scott administration first proposed it in the fall. Union leaders say they have no intention of backing down.
In effect, the state is proposing to privatize Medicare, leaving retirees at the whim of the private insurance companies, which will administer the plans and have a motive to refuse needed care, said Steve Howard, the union’s executive director.
“The governor has more faith in the insurance industry than our retirees do,” Howard said Seven days on Tuesday.
Medicare Advantage plans are offered by private health insurers who must follow the coverage rules established by Medicare. Some companies offering the plans have been accused of increasing the number of sick people to increase reimbursements and denying retirees necessary medical care, Howard said.
Now, when this happens under current Medicare coverage, retirees or unions can resolve the issues on the ground by contacting the state Department of Human Resources. However, as part of a private insurance plan, retirees would have to deal with foreign insurers.
“Turns out you can save money by denying seniors health care,” Howard said. “It’s how these companies save money.”
Administration officials say the Medicare Advantage program would mirror existing benefits, lower some co-payments for services like chiropractic, and be tailored to the needs of retirees. The program would be all-encompassing, with medical and pharmaceutical coverage handled on a single card.
The reason college system teachers and retirees haven’t complained may be because they didn’t have much choice, Howard said. However, state retirees are legally required to receive the same health care benefits as working employees, which means lawmakers must approve the change, he argued.
That seems unlikely. Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) and House Speaker Jill Krowinski (D-Burlington) issued a joint statement last week opposing the change.
“We share the concerns of many retired government employees about the legality and the financial and health implications for our state’s retired government employees,” they wrote. “State retirees have served the state of Vermont for years and deserve reassurance that the healthcare benefits they are promised will be protected.”
The main reason the state will save money is federal subsidies, which could go away at any time, Howard said.
“Do you trust Marjorie Taylor Greene to keep these subsidies going?” said Howard, ticking off the names of far-right Republican congressmen. “Do you think George Santos should be in charge of your health care? Phil Scott does.”
Howard said the government wanted to push through the change on January 1 this year but backed out after hearing from angry pensioners and realizing they had “stepped on something”.
Union officials expected the governor to try to sell the switch in his budget address, but took comfort in the fact that he didn’t mention it.
“If it’s such a great plan, why wasn’t it mentioned?” said Howard.