State and Railroad Change Benefits
By Jeff Sturgeon jeff.sturgeon@roanoke.com 981-3251
The Commonwealth of Virginia and Norfolk Southern Corp. have unveiled a major change in retiree health benefits, one that shifts many Medicare-age retirees to new Medicare drug plans Jan. 1.
Prescription drug coverage is a new benefit available to all on Medicare regardless of income. The massive federal program carries a multibillion-dollar price tag and is off to a slow start, with many seniors reporting they are confused because there are too many plans to choose from. Enrollment is scheduled to begin Nov. 15.
Anne Waring, spokeswoman for the Department of Human Resource Management, said Wednesday the state’s Oct. 25 announcement is designed to shift 27,000 retirees, survivors of deceased retirees and other covered persons from their current retirement-plan drug coverage to a Medicare plan. The overall out-of-pocket cost will be about the same, she said, though premiums will fall.
Because of the state’s sponsorship, retirees can allow themselves to be automatically enrolled. That will spare the retirees and other covered persons the task of having to choose a Medicare drug plan.
In addition, the state is sweetening the standard Medicare prescription drug benefit, which has been criticized as being skimpy, in at least one significant way. Retirees won’t be subject to a mid-year deductible, which can save them certain out-of-pocket costs.
Meanwhile, about 8,400 Norfolk Southern retirees who held union jobs have learned that their retiree drug coverage is changing.
Under the existing plan, the union retirees pay about $320 a month for health insurance that includes drug benefits. On January 1, those benefits will cease; union retirees will be switched to Medicare Plan F, a health program that does not include drug benefits but carries a reduced premium. To continue drug coverage, they will have to enroll in and pay for a Medicare drug plan.
Their premiums will be cut in half, but they could end up paying more out of pocket for prescription drugs, depending on the plan they choose and how much they’re paying for medication, said Tom McCoy, general chairman for the Brotherhood of Maintenance of Way Employees in Kentucky.
As for nonunion railroad retirees, the company says their coverage need not change because it is as good, if not better, than Medicare Part D.