JULY 2005 - Seeking Federal Refund Monies - While angered members simmer over the loss of the state's Medicare Part B reimbursement, we continue to seek the necessary funds, which would enable the Commonwealth to re-establish the long-standing policy of picking up its share of Part B.

Uphill Battle Since '02

In October 2002, Acting Governor Jane Swift cut the annual $248million Medicare reimbursement item from the FY03 GIC budget.

At the time, retirees received no support from the Group Insurance Commission, the agency that should have defended the budget item that the Commission itself submitted.

Instead, GIC Director Dolores Mitchell defended Swift by saying the reimbursements began more than three decades ago as an incentive to get retirees to switch to Medicare when they were eligible, but in recent years eligible retirees have been required to join Medicare.

"You have to sign up for it by state law, but somehow or other the major share of the premium has continued even though the original reason for it has long since gone," Mitchell said in October 2002 (Metrowest Daily News).

What Mitchell failed to say was that the original reason for encouraging members to purchase Medicare Part B was the savings of money by the state. Part B pays the lion's share of doctors' bills, thus saving the state millions of dollars.

"Bill Burke, the founding father of the GIC, pointed this out," said Association President Ralph White. "He knew that by reimbursing members the state's share of Part B, the state would save far more than the cost of Part B premium reimbursement."

"Burke wrote the Group Insurance language back in 1965," said White. "I can clearly remember him saying that Medicare was a win-win situation. The retiree would receive a reimbursement and thus save money on insurance premiums, while the state would also save money because of what Medicare paid in claims.

"By Dolores Mitchell saying that 'the original reason has long since gone,' it gave Swift, future governors and the legislature a rationale for eliminating Medicare reimbursement from the budget. Dolores Mitchell is highly respected for her credibility when it comes to health insurance. And that's what hurts. Unfortunately, her position on Medicare reimbursement continues to unfairly haunt retirees, forcing us to fight an uphill battle.

"Also, what is frequently overlooked is the fact that retirees who buy Medicare Part B are also covered under Medicare Part A which picks up 80% of hospital costs. This coverage is the result of retirees, or their spouses, having worked under Social Security at one time during their career. This coverage doesn't cost the state a cent."

Many Communities Share Cost

A number of cities and towns share the cost of Medicare Part B. Boston, Fall River, Belmont and Needham, for example, contribute 50% to their retirees. Quincy picks up 75%, while Newton pays 80% of the Part B cost.

Waltham, Cambridge and Plymouth have the Cadillac models of reimbursement. Waltham pays the full cost in four quarterly checks to retirees. Cambridge contributes 99 percent to its retirees, and Plymouth either 99% or 90%, depending on the retirement date.

"Retirees save the town money," said Bob Drew, a retired Natick police officer who is the chairman of the Natick Retirement Board. "Retirees in communities that don't receive Part B help are being cheated."

Nunzio Piselli, a retiree and longtime member of the Newton Retirement Board, says that employee unions played a role in the city's 80% reimbursement. "When I was working, we made this (80% reimbursement) a top priority. We knew that we would be retiring one day," he said.

"I know we are very fortunate in Waltham, but in fairness, every city should pay at least part of the Part B premium," said Chuck Williams, President of the Retired Municipal Employees of Waltham... "Look at the money cities save."

Tom Kelley of Plymouth says that retirees who don't receive Medicare Part B reimbursements are shortchanged. "A city or town should contribute the same percentage to Medicare Part B that it does for retirees' insurance. Otherwise, the retiree is being short-changed and is paying 100% for a major component of his insurance. And the same goes for state retirees." Kelley, a retired police officer, is also an elected member and chairman of the Plymouth Retirement Board.

Well said Tom!