"Don't Do That"
Our members are still feeling the effects of the punitive healthcare legislation passed in the first session of the 125th Legislature.
- An Augusta retiree living in Manchester, Maine was denied a prescription drug card for living outside of the service area. Manchester is six miles from Augusta.
- Another Augusta retiree living in Florida does not get the same insurance rate as her counterparts in Maine.
- A third retiree had her prescription for cancer treatment denied.The total out-of-pocket expenses for these retirees and the active group from which they retired went from $1600 per family (the MEABT plan) to $10,000 (the new AETNA high deductible plan).
- Their premium rates are valid for only 6 months.
- Neither the insurance salesman that sold this “pig in a poke” to Augusta or the Augusta School District itself had the capacity to administer the plan and asked the MEABT if it would take on the responsibility.
What happened? These retirees had to move away from their MEABT plan because the Augusta administrators, the active employee group to which they belonged changed insurance carriers.
MEA Executive Director Rob Walker notes, “While the MEA does not represent this group, it is an important case study that should inform us all. School boards and superintendents are not insurance experts. They can make a decision to change carriers based on just the price and the advice from one insurance salesman.”
Price is important but these insurance non-experts may miss or ignore other important factors such as:
- rate stability (see the six-month bullet above);
- actually expecting the MEA Benefits Trust to administer a competitor’s plan (see the pig in a poke bullet);
- how coverage is extended to those moving to a new plan (see the Manchester bullet);
- how well the new company can service the new pool without inconveniencing or harming the participant (see the cancer bullet);
- how education employees should be treated as assets to the system and receive an insurance benefit that keeps them healthy and on the job; and
- how increased out-of-pocket expenses change behaviors and prevent employees from seeking the care they need.
MEABT Executive Director Christine Burke adds, “Some of these issues like the drug card or the prescription cancer medication may get worked out over time — but not before the damage is done. Rate stability is never addressed. What will happen to a small group of only 100 participants when they must share the risk and cost of expensive care?”
It is important to keep in mind how group health insurance works. A large pool of participants can spread the cost of expensive care over more users than a small pool. This minimizes the effect of a large claim. The MEABT insures nearly 70,000 participants. The Augusta plan insures 50 participants.
“Trustees go through extensive training every year. We talk about design and coverage and costs and more at every meeting,” reports MEABT trustee Susan Grondin. “We’re still not the experts. The trust enlists the advice of insurance experts as we contemplate decisions about the plans. We would not take the advice of an insurance salesman without further investigation.”
While the MEABT offers coverage to locals affiliated with the Maine Education Association, it also extends the offer to other employees in a district who are not covered by collective bargaining agreement where MEA is a party. It is a win for everyone.
The school district gets affordable stable insurance for its employees. The MEABT keeps the size of its insurance pool large enough to create the stable insurance. MEA locals have the added advantage of collective bargaining to protect their health insurance interests.
Everyone has heard a version of the old, old joke that starts, “Doctor, Doctor, every time I raise my right arm I get a sharp pain in my shoulder. What should I do?”
“Don’t do that!” replies the doctor.
This is not a joke, but the advice is the same.
“Every time my school district changes insurance companies my coverage is reduced, my out-of-pocket expenses increase and my rates are only good for 6 months. What should I do?"