Under the Dome

State employee retiree shift to Medicare in NC appears stalled, for now

State government retirees on Medicare were concerned last month about draft legislation that would shift them to Medicare Advantage plans available through the private market.

But on Monday, a potential reprieve surfaced: the state may simply study the concept instead.

That’s a direct answer to the retirees’ concerns about whether Medicare Advantage plans were a good fit for them, according to Sen. Fletcher Hartsell, a Concord Republican and co-chair of a legislative panel looking at the topic. At his request, the panel voted to strike the section of the bill that included the Medicare Advantage mandate and instead have a new committee form to look at what might be feasible in the future. The bill would require full legislative approval before it’s effective.

Shifting all Medicare-eligible state government retirees to Medicare Advantage plans would, in effect, shift state costs to the federal government and help the state trim down a large unfunded liability in the retiree health system.

But, Hartsell noted during a panel meeting on Monday, retirees in the state system have kept the phones ringing with concerns about possibly paying higher drug costs, a lack of coverage for certain kinds of treatment – chiropractic is one – or have a smaller network of doctors under Medicare Advantage.

“I don’t think they’re all that portable, these plans,” said Harry Messenger, who in October retired from the state Department of Environment and Natural Resources (now called the Department of Environmental Quality).

The bill already included a provision to set up an appeals process for retirees who feared Medicare Advantage could be a bad fit.

But, “What we’re simply trying to do is to strike (the mandating) section and eliminate the complications,” Hartsell said.

But that doesn’t address the unfunded liability, noted Sen. Ralph Hise, a Mitchell County Republican. With a 30-year scope, it’s valued at $25.5 billion on the state’s retiree health fund.

The fund provides the state’s share of retiree premiums to the State Health Plan. That figure is expanding thanks in part to a growing retiree class and the state’s practice of funding benefits when they’re provided, rather than pre-funding them during an employee’s time on the job.

After the panel’s meeting, Hise noted it’s still early in the process – the legislature is scheduled to reconvene in April 2016 – and there’s still plenty of time to prepare a bill that tackles the liability in some way.

The legislation approved by the committee on Monday would set up a joint committee to explore those options on an ongoing basis.