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Retired HWRSD teachers voice concerns about health insurance switch

Date: 8/20/2015

WILBRAHAM – More than 100 retired teachers filled the front rows of Minnechaug Regional High School’s auditorium during a public hearing regarding a health insurance switch that could save the district at least $20 million during the next 20 years, but could have a negative impact on retirees.

The School Committee hosted the public hearing during its Aug. 18 meeting to inform retired teachers about a potential decision to switch retired teachers’ health insurance coverage plan from Group Insurance Commission (GIC) to the Scantic Valley Regional Health Trust.

School Committee Chair Peter Salerno said the committee is considering revoking Massachusetts General Law Chapter 32B Section 11 E in an effort to reduce costs to the district. The Hampden-Wilbraham Regional School District (HWRSD) pays 85 percent of premium costs for GIC annually.

The law reads states that it is the district’s responsibility to appropriate funds or apply payments for group life and health insurance coverage for retired teachers as well as for their surviving spouses, provided such teachers “receive a pension or annuity allowance from the teachers’ retirement system and for the payment of premiums.”

It further states that this law can be revoked by a regional school committee. A nonbinding vote is required by retirees present during the public meeting, but the ultimate decision rests with the School Committee.

Salerno said current public employees do not have the right to bargain collectively over health insurance contribution rates of retirees based on Supreme Judicial Court case.

Superintendent of Schools M. Martin O’Shea said he believes the proposed plan is necessary because the district owes a total of $85 million Other Post-Employment Benefits (OPEB) costs. That number rises each year.

“As much as we have an obligation to our retirees, our students, and our future teachers, we also have an obligation to the taxpayers of Hampden and Wilbraham and we have to be cognizant of the pressures that taxpayers in both towns face,” he added.

The district’s percentage of its budget for retirees for 2015 is approximately $1.9 million, which accounts for 4.48 percent of the budget, O’Shea said. During the next 20 years that number will increase to $5.6 million, which would account for 11.85 percent of the budget.

“We could not sustain our programming, we could not sustain services to children if we did not address the escalating cost of health insurance as a percentage of our overall budget,” O’Shea explained.

He added the plan is to increase the premium costs for retirees under Scantic Valley gradually during the next 20 years, from 15 percent in 2015 to 35 percent in 2035.

Salerno said the district has no “local control” or input to the selection or level of benefits as well as the cost of insurance plans under GIC.

GIC does not offer Blue Cross Blue Shield, which is a heavily used by current staff through the district’s existing plan through Scantic Valley.

O’Shea said in fiscal year 2015 (FY15), the fiscal deficit of GIC was $190 million statewide and required a supplemental budget transfer to close the gap.  

David Bernstein, the organizer of the group of retired teachers and a 35-year HWRSD teacher who retired in 2008, said currently the retirees are covered with GIC UNI Care, which is a monthly rate of $165.20 for an individual and $399.06 for a family.

He added that if the School Committee chooses to switch to Scantic Valley, the only alternative is Blue Cross PPO, which would cost $234 a month for individual and $512.85 for families.

Bernstein said a member of the School Committee told him that many specialists are dropping GIC patients.

He asked the group of retirees to raise their hands if a doctor dropped them because of their GIC health coverage. Not a single hand was raised into the air.

Close to a dozen teachers recounted stories of their experiences with GIC, all of which were positive.

Mary Taft, a retired science and technology teacher who was in the district for 12 years, drove two hours from New York to attend the meeting and said her current UniCare Medicare Extension plan is almost identical to Blue Cross PPO except for the cost.

She added that she pays $166 a month for UniCare and as of July 1, would have to pay $780 for Blue Cross PPO.

“If I take that and subtract it from my pension and subtract federal tax I’ll have ... would you like to guess? $843 for a pension. It won’t even buy cat food. Keep the change. It’s a worthless pension. All it will do is pay for extremely inflated health care and a couple of trips to the grocery store,” Taft said. “I will have to work for the rest of my life. Thank you.”

Peter Gartner, a retired English teacher who remembers when Hampden and Wilbraham schools regionalized in 1959, said he moved to Maine after retiring and has lived with Waldenstrom macroglobulinemia, a rare and incurable form of cancer, for the past 13 years. The life expectancy for this form of cancer is typically seven years.

He said he is chronically anemic with a weak immune system and requires bi-monthly chemotherapy and under Blue Cross PPO, he would have to travel at least an hour to the nearest hospital that accepts the coverage. There are only three major medical centers in Maine.

“Several years ago I became aware of an effort by Blue Cross Blue Shield to improve their bottom line by becoming a restricted point of access PPO,” Gartner said. “They signed an agreement with Maine Medical Center in Portland as the primary preferred provider. Later, to satisfy the Maine Insurance Commission, they also agreed to support treatment by the Eastern Maine Medical Center up in Bangor. That left any patient with Blue Cross Blue Shield in the vast middle of the state without any approved doctors or any approved hospital to turn to.”

He added that if he has to switch to Scantic Valley, he would have to give up his doctors, whose offices are 30 minutes from where he lives and establish a new medical team for him more than 2 hours away going either north or south.

“That travel time is in good weather,” he noted.

Gartner said the insurance switch would “shorten his run” with his illness.

“That’s good, it’s easy money savings for the School Committee,” he added.

After the meeting, Salerno said if there was a demonstrative hardship by the switch, the School Committee would work with individuals to make sure “they don’t come out in a negative position” and deal with hardship cases “equitably.”

O’Shea said the School Committee may decide to vote on this issue at its Aug. 25 meeting.