Another glaring example has been the ongoing effort by private employers to legalize the practice of offering inferior insurance or none whatsoever to their retirees who enroll in Medicare at age 65. Unfortunately, it appears that this effort is closer to a reality at this time.

For over three years, we've reported on this controversy, beginning when Erie County (Pennsylvania) retirees went to federal court, claiming age discrimination when their employer transferred them to an inferior insurance plan when they turned 65 and enrolled in Medicare, and eventually won (January 2000 Voice). Back then, we noted that private employers were particularly concerned over the court's decision and were mobilizing against it.

As they saw it, the Erie County ruling could force them to maintain reasonably equivalent health insurance coverage beyond age 65 even though an increasing number of employers, in order to save money, eliminated or substantially downgraded coverage once a retiree (at age 65) enrolled in Medicare. To reverse the court decision, the private industry representatives chose not to focus their effort in the courts.

Instead, they waged a full-court press with the federal government, specifically the Equal Employment Opportunity Commission (EEOC). They lobbied the feds to have them allow employers to offer no or inferior insurance to their Medicare eligible retirees and not be charged with age discrimination, as happened with Erie County. (November 2002 Voice).

Private Industry Threatens: EEOC Blinks

"Even during the congressional debate to provide prescription drug coverage to those who do not have it, the private sector tried to insert a provision that would have allowed the unfair practice," recalls Legislative Chairman Bill Hill. "While they proved unsuccessful with the Congress (January 2004 Voice), they continued to press the EEOC and regrettably have succeeded for now.

"Basically they (private employers) threatened that unless the feds gave them an exemption from age discrimination violations for age 65 or over retirees, then retirees under age 65 could also lose their insurance coverage. And the EEOC blinked in the face of those threats and gave them the exclusion they wanted."

Just after our May Voice went out, the EEOC issued its ruling that allows employers to eliminate or reduce health benefits for retirees when they become eligible for Medicare at age 65. While the ruling is being reviewed by other federal agencies, experts, in EEOC matters, expect that it will become final.

In stark contrast to what the federal ruling means to private sector retirees over 65, our members, covered by Medicare and a supplement plan, will not suffer the same fate once they are enrolled in the federal program. That's because there are strong protections in the state law governing state and municipal health insurance for public retirees (Section 18 of Chapter 32A for state retirees and other Group Insurance Commission (GIC) enrollees and Section 18 of Chapter 32B for municipal retirees). When public retirees transfer into Medicare and a supplement plan, the law requires that they continue to receive equivalent insurance benefits and coverages.

"As we emphasized while reporting on this controversy over the past three years, state and local retirees, who are required to enroll in Medicare and the supplement insurance, need not worry about having inferior coverage to what they had before age 65," comments Hill. "State law prohibits what the EEOC is attempting to allow, namely discriminating unfairly against certain public retirees, and the fed's ruling does not override that law."