Gov. Phil Scott’s plan to save money by moving retired state workers to a new private health insurance plan has public employee unions furious and Democratic lawmakers vowing to block the plan. ‘effort.
The administration says moving more than 6,000 retirees to a new Medicare Advantage plan could save the state $9 million, reduce retiree premiums and reduce the system’s long-term liabilities.
“It seems like a win for everyone,” Scott said Tuesday during his weekly press conference.
He noted that retired teachers and state college employees have moved to private health insurance programs. “I haven’t heard any complaints from them,” the governor said.
But the Vermont State Employees Association has resisted the idea since the Scott administration first proposed it in the fall. Union leaders say they have no intention of backing down.
The state is effectively proposing to privatize Medicare and leave retirees at the mercy of private insurance companies who will run the plans and have a reason to deny needed care, said union executive director Steve Howard.
“The governor has more faith in the insurance industry than our retirees do,” Howard said. Seven days tuesday.
Medicare Advantage plans are offered by private health insurers who must follow coverage rules set by Medicare. Some companies offering the plans have been accused of inflating people’s degree of illness to increase reimbursements and deny retirees needed medical care, Howard said.
If this is happening now under current Medicare coverage, retirees or unions can resolve the issues locally by working with the state Department of Human Resources. Under a private insurance plan, however, retirees would have to deal with out-of-state insurers.
“It turns out you can save money when you deny health care to the elderly,” Howard said. “That’s how these companies save money.”
Administration officials say the Medicare Advantage program would mirror existing benefits, reduce some co-payments for services such as chiropractic care, and be customized to meet the needs of retirees. The program would be all-inclusive, with medical and pharmaceutical coverage managed using a single card.
Perhaps the reason teachers and retirees from the college system haven’t complained is because they didn’t really have a choice, Howard said. State retirees, however, are legally required by law to receive the same health benefits as active employees, which means lawmakers would have to approve the change, he argued.
It seems unlikely. Senate Pro Tempore Speaker 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 state employees regarding the legality and the financial and health implications for our state’s retired public servants,” they wrote. “State retirees have dedicated years of service to the state of Vermont and they deserve the assurance that the health care benefits they have been promised will be protected.”
The main reason the state will save money is because of federal grants, which could disappear at any time, Howard said.
“Do you trust Marjorie Taylor Greene to keep these subsidies in place? Howard said, ticking off the names of far-right Republican members of Congress. “Do you think George Santos should be in charge of your health care? Phil Scott yes.”
Howard said the administration wanted to impose the change on Jan. 1 this year, but backed down after hearing angry retirees and realizing they had “stepped on something.”
Union officials expected to hear the governor try to sell the switch in his budget speech, but took comfort in the fact that he didn’t mention it.
“If it’s such a good plan, why wasn’t it in the speech?” Howard said.