Executive Council hears pitch to overhaul N.H.’s state retiree health care plan

  • Department of Administrative Services Commissioner Charlie Arlinghaus (far right) briefs Gov. Chris Sununu and the Executive Council on a proposal to overhaul the state retiree health care plan on Wednesday. ETHAN DeWITT / Monitor staff

Monitor staff
Published: 6/6/2018 9:58:43 PM

The New Hampshire Department of Administrative Services (DAS) is proposing a sweeping overhaul of the state’s retiree health care plan, seeking to switch users into a Medicare program that officials say could help the state save $11.8 million through 2020.

The proposal, presented to the Executive Council on Wednesday, would move the state’s 9,600 Medicare-eligible public retirees off their present plan – a state-funded program called “Medicomp” – and onto a federal initiative known as Medicare Advantage.

That move would allow the state to take advantage of a higher federal match rate under Medicare Part C, the Medicare Advantage program. The proposal would reduce projected costs from January 2019 to December 2020 from $41 million to $29.2 million, according to the department.

Anthem health insurance would continue administering care for retirees, but under a new funding structure overseen by the federal government.

The proposal comes as the state has struggled to keep up with rising health care costs in its retiree health plans, forcing legislators to address multiple budget shortfalls in recent years, according to the department.

Presenting the plan, DAS Commissioner Charlie Arlinghaus called it an opportunity to save money and keep the program viable. And he said no patient would lose his or her doctor or experience a change in benefits.

“The doctors you will be able to go to are anyone who takes Medicare,” he said. “Which, theoretically, if you’re already in the Medicare program, that’s who you’re using now.”

Under the proposal, Medicare-eligible retirees would receive insurance through Anthem, which would in turn be reimbursed by the federal Centers for Medicare and Medicaid Services on a per-person basis.

The rate would be determined by the health of the people being served and the quality of the care offered, incentivizing Anthem to improve its service, according to the department. By working under Part C of the Medicare program, retirees would benefit from a coordination between Medicare parts A and B, which cover hospital expenses and provider costs, respectively, and Part D, which covers pharmaceuticals.

“Other than the increased attention to the care retirees are receiving, members should experience minimal disruption while continuing with the same level of medical coverage with the flexibility to see the same Medicare participating providers they see today,” Arlinghaus wrote in a letter accompanying the proposal.

The plan comes months after Anthem announced that it had expanded its presence in the state enough to leverage more federal dollars through the Part C program and lower premiums, the department said, a major factor in the cost savings to the state.

And it comes in response to years of struggles with the state’s retiree health care service.

In 2015, the Joint Legislative Fiscal Committee struggled to plug a $10.6 million gap after the biennial budget failed to account for cost increases. Meanwhile, the latest fiscal year 2018-19 budget, passed last year, required a $25.4 million boost just to keep the program on course, according to the department.

Last year, the department commissioned a study with an outside party, the Segal Co., to study options to resolve the problems; the Medicare Advantage program was one of the options recommended, the department said.

How the proposal fares is an open question. On Wednesday, executive councilors opted to push off a decision until the next meeting, June 20, to hear more input on the proposal’s impact on retirees.

Councilor Russell Prescott, R-Kingston, a key swing vote, said he was still undecided on the issue, but is leaning toward supporting it.

“I’m just going to review the contracts, make sure there’s no downside, make a couple more calls and get confirmation on that,” he said. “It appears that it won’t have any interruption in services, but there is a change. So it might be something different for retirees, but it will not affect their pocketbook; it will not affect where they get their health care delivery from.”

For his part, Arlinghaus said the plan is sound.

“It’s one of the few opportunities remaining where we can save money in a way that’s not cutting benefits or functionally changing a person’s benefits,” he said. “It really is a win-win.”

(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)

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