A MAJOR CHANGE IN MY HEALTH INSURANCE BENEFITS

Published February 9, 2014 by JoAnna Senger

This fall, my former employer (University of California) notified me that, for the first time in my memory, out-of-state retirees would no longer be covered by UC group health insurance. Instead, UC will give a Health Reimbursement Account, a sum of money to use for insurance premiums and other health expenses. UC hired an outside firm to decide our insurance needs to connect us to the best insurance plan in our area.

I will pay less out-of-pocket under the new plan than I now do, thanks to the level of funds in my HRA. I also have more options in terms of insurance plans. (I selected AARP medical and prescription plans.)

The catch? My former employer had a long-standing practice: if you ever relinquish your health insurance benefits, you will no longer be eligible to receive them in retirement. The new policy is that moving out-of-state means that you have relinquished your participation in group insurance, although we were never told that at the time. In fact, I don’t remember seeing that new policy in any of the 2013 enrollment documents. I found out because I asked.

Apparently, my Arizona primary residence now acts as if I have renounced my group health insurance. SO…even if I move back to California, I will no longer be eligible for UC group insurance. I assume that the HRA funds will still apply.

    My take on all this

: I don’t know if my former employer is saving money by this new practice, but it is certainly possible. Employers who sponsor health insurance have more expenses than just the premiums. They must also pay for a benefits staff to administer the programs. The more employees and retirees, the larger the staff. The more insurance programs offered, the larger the staff. Employers may also pay for outside contractors to process claims. Smaller employers also pay insurance brokers in addition to internal staff and/or outside contractors.

My best guess on the future of health care: Medicare for everybody. The insurance companies can sell their supplementary plans, as they do now.

2 comments on “A MAJOR CHANGE IN MY HEALTH INSURANCE BENEFITS

  • JoAnn – ideally, Medicare for all is an excellent solution because it is single payer, does not depend on middlemen insurance companies which are for profit, and because it has the size and bargaining power to negotiate lower drug prices and medical costs. Single payer was abandoned because the Republicans cried socialized medicine and scared everyone away. Obamacare is a good first step but someone has to figure out how to get the insurance companies out of the insurance equation, and that is no small feat. – GH

  • Ah, we would be talking about the single payer system which is socialized medicine. In today’s world, in the United States ones pays anywhere from two to ten times more for hospital, doctors, and prescription drugs than most any other place in the world. The reason we pay more is because all of those other countries have a single payer system – the government and the government mandates what is charged for health care.

    So, if the socialization of medicine works so well for every one else, why don’t we do it? The answer is that we probably will over the course of the next few decades. And the reason we will is that the middle class is being priced out of the health care market. Before long the only people who will be able to afford health insurance will be those whose health care is being subsidized by the government and those rich enough to be able to afford it.

    So what would be the down side? In my mind, there are three possible major problems with the United States socializing medicine. The first is the possibility that medical care world wide will decline. Why so – as it stand now, the United States is subsidizing pharmaceutical cost for the rest of the world. When that subsidy stops, pharmaceutical companies will have to cut cost which will include cutting back on research and development which could lead to substandard medicines as production shifts third world countries. Another possible down side is fewer doctors and less hospital construction. And perhaps the biggest fear is that socializing medicine will precipitate more and more government control as our great country continues its downward spiral.

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