Meeting Report for RMAC/Health Care Committee; April 9^th, 2010

Attendees;

John Kotson—RMAC Chairman, IBM Retiree

Ed Bettinardi—Johns Manville Retiree, Health Care Committee Chairman

Hazel Floyd—AUSWR CO/WY President, Health Care Committee Member

Barbara Wilcox—AUSWR CO/WY Health Care Specialist

Helen Domaratz—IBM Retiree, RMAC Member

Pat Finley—AUSWR Member, RMAC Member

John Romelfanger—AUSWR CO/WY VP Membership, RMAC Member

National

Health Care Reform Legislation—a review was conducted of the Kaiser Family Foundation summary of the combined health care bill with emphasis on those provisions that might affect retirees or older workers;

a.     Government subsidies are provided for incomes up to 400% FPL, nothing for higher incomes. No impact for persons purchasing Medicare supplemental or Medicare Advantage insurance.

b.     An employer sponsored reinsurance program available for retirees over 55 and not eligible for Medicare. The program will reimburse employers 80% of retiree medical claims between $15,000 and $ 90,000.

c.      Tax changes in the bill;

·        Increased threshold for deducting medical expenses from 7% to 10% of gross income.

·        Increased the Medicare part A payroll tax from 1.45% to 2.35% for incomes above $200,000 for individuals and $250,000 for families

·        Impose an excise tax on insurers of employer sponsored health plans with values of $10,200 for individuals and $27,500 for families (Cadillac Plans).

·        Eliminated the tax deduction for subsidy employers receive for Medicare Part D. Ed Bettinardi has talked to Johns Manville officers and they don’t think it is a big deal. Companies that have announced write-offs due to the tax change will probably continue their drug retiree programs.

d.     Medicare drug program changes;

·        All the prescription drug provisions that were in the House Bill were dropped. RMAC wants the provision to allow Medicare to negotiate drug prices with the manufacturers reinstated. The group is split on the importation/re-importation of prescription drugs from other FDA approved countries.

·        Medicare part D subsidies are reduced for individuals with incomes above $85,000 and couples with incomes above $170,000. This will increase their part D premiums.

·        Biological drugs (e.g. cancer drugs) that used to have complete patent protection are now limited to 12 years.

e.     Health Insurance Exchanges;

·        Persons purchasing insurance under the Health Insurance Exchanges are protected against catastrophic medical expenses, with annual out-of-pocket limits keyed to Health Savings Accounts (HSA’s) limits, $5950 for individuals and $11,900 for families in 2010. No such protections are provided for persons on Medicare.

·        Premium increases due to age are limited to a 3:1 ratio.

·        Members of Congress and their staff’s have to buy health insurance from the exchanges. Other federal employees get to keep their current insurance through the FEHBP. Federal retirees not mentioned.

·        Grandfathered individual and employer sponsored plans may not have to adhere to the new exchange benefit standards. Some clarification is needed to determine what is meant by “benefit standards”.

f.       Other;

·        Co-payments are dropped for preventative care for Medicare recipients.

·        CLASS Act is a new national, voluntary insurance program established under this law for purchasing community living assistance services. Since it is financed through voluntary payroll deductions, it appears to exclude retirees from participating.

RMAC Legislative Agenda for 2010—a discussion was held and a new agenda was circulated for comments;

a.     Action Items—work for changes still needed in Medicare

·        Add catastrophic coverage to eliminate bankruptcies due to medical costs. CBO Budget Option 81, 2008, shows how this can be revenue/cost neutral.

·        The Sustainable Growth Rate (SGR) calculation needs complete revision. Doctors are abandoning Medicare patients because of the pay restrictions of SGR.

·        Give Medicare ability to negotiate drug prices for cost savings and future viability of Medicare

b.     Supporting Activities;

·        Align ourselves with Government representatives who support our goals and allow our issues to be heard.

·        Analyze content of the health care reform legislation just signed into law for impact on retirees. Track rule making and implementation, including at the state level.

·        Demonstrate our support of the health care reform legislation whenever possible by helping others to understand what it does.

·        Track progress of the Presidents bi-partisan commission on entitlement reform.

·        Support anything that supports survivability of Social Security and Medicare.

·        Monitor any proposed changes to ERISA and lobby for protection of pensions under ERISA. Protect pension funds from being used for;

--Corporate restructuring expenses, buy-outs

--CEO’s lavish retirement programs

--Regular employees health care expenses

Website Updates—Pat Finley is now in a position to resume making updates. Submissions should be sent to Barbara Wilcox, who is the gatekeeper.

Colorado/Wyoming

a.     Senator Mike Enzi—John Rommelfanger will schedule the trip to Cheyenne for AUSWR Board, probably in June. Hazel Floyd will contact Enzi’s office to see if they can meet with us on the same date.

b.     Senator Michael Bennet—Joe Halpern has an action item to get Bennet’s challenger, Andrew Romanoff to our next meeting.

c.      Senator Mark Udall—Ed Bettinardi is resigning from the group and Hazel Floyd will take this assignment temporarily.

d.     Congressman Jared Polis—Helen Domaratz and John Rommelfanger were meeting with the Congressman on April 9^th. They will tell him about our new agenda. They have a good working relationship with Polis and his staff. The group for Senior Issues continues to meet.

e.     Congresswoman Dianna DeGette—Barbara Wilcox will contact her staff with our new agenda.

f.       Congressman Ed Perlmutter—Pat Finley will try to get Jerry Pifer, his community liaison person to our next meeting.

g.     Congresswoman Betsy Markey—John Kotson stated that the last contact with her staff stated they didn’t want to talk to RMAC, because we are not in her district. They may change since this is an election year.

The next meeting will be held on June 25^th at Hazel Floyd’s home. Everyone has an action item to find new members and a functional replacement for Ed Bettinardi. Ed will be sorely missed with the expertise he brought to the group on many issues.

John Kotson