Oak Ridge contractors, like many others within the DOE complex, are faced with continually increasing costs of health insurance for their employees and their retirees. Beginning in 2012, significant changes in health insurance plans were instituted primarily for future employees. ORNL was the first local contractor to alter significantly the supplemental health program that it provides to retirees and their spouses. The change embodied migration from a group plan administered by a single insurer (United Health Care) to individual plans provided by several different insurers.
ORNL shared the cost of the United Health Care plan with retirees on a 50:50 basis and will continue to do so for prescription medications under the new plan. ORNL has stated its intention to continue to share other health care costs on an approximately 50:50 basis, based on the average cost that participants must pay. It does this by contributing a fixed amount of funds to each individual’s Health Reimbursement Account, which can be then used to offset the cost of medical expenses and non-prescription drugs, at the discretion of the individual retiree or spouse. For 2013, the contributed amount is $600 per year per individual. The retiree share of prescription drug cost is $96 per month.
ORNL contracted with Extend Health, Inc., to manage the migration of some 3472 retirees and spouses into individual insurance plans and to service those participants, beginning July 1, 2012. It was a massive, complicated, detail-ridden task. It generated considerable frustration, insecurity, mistrust, and resentment among the retiree population. CORRE conducted a survey at the time, to identify problems and clarify experiences with the new plan. Click here to access the report of that survey.
The impact on retirees and spouses, as measured by the CORRE survey of its membership, was a significant increase in healthcare cost. The size of the increase varied greatly, depending on each individual and the insurance plan that he or she selected. Cost increases of as much as 50% were experienced by some retirees. Even when allowance is made for decreased out-of-pocket costs, using cost estimates provided by Extend, the survey indicated an average cost increase of ~14% per participant. Moreover, the new program is inherently more costly to the elderly. Clearly, ORNL benefited financially from this change—at the expense of retirees and spouses.
CORRE continues to monitor the experience and acceptance of the new program. From the retirees point of view, it is crucial that the 50:50 cost sharing aspect of the program be maintained.