Pima changing retiree health coverage

Feb 21, 2010 — The Arizona Daily Star

Andrea Kelly

Feb. 21, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Retired Pima County employees who are not yet eligible for Medicare will have to change health insurance plans, at a higher cost, starting July 1.

A cost-cutting move by the county will force the 670 retired employees who have not turned 65 to switch to the more expensive state health plan or find their own coverage. State health insurance will cost individuals on the county HMO plan $112 more in premiums each month.

The county will have to pay an extra $4.8 million for health-care premiums starting July 1. Most of that increase will be shouldered by employees, said Gwyn Hatcher, Pima County Human Resources director. If retirees stayed in the system, she said, the county would be looking at a $12 million minimum increase the following year.

"Our retirees are using much more than what they put in in premiums, and the employees end up subsidizing them," Hatcher said.

The county simply can't afford to keep the most expensive members of the health insurance program, and respond to all the other increased pressures on the budget, said Chuck Huckelberry, Pima County administrator.

"Given the fiscal stress that would be placed on the County by state budget balancing, it is imperative that these employee benefit costs be kept as low as possible," Huckelberry wrote in a late January memo.

Nearly three-quarters of the retirees on the county health plan insure only themselves and do not pay to cover a spouse or other family members.

They pay $236 per month for the county HMO plan, Hatcher said. They pay $348 per month on the state system. But that's still a bargain, she said, because if the county kept them in the system, their premiums would have increased to $721 per month to cover the amount of insurance they are using.

Huckelberry said he assumed that price would be prohibitive and impractical for most people, so the state plan is a better option for them, and the shift could head off larger increases for current employees.

"If we make this transition, we could be seeing very low increases next year" in employee premiums, Hatcher said.

Besides the 670 retirees younger than 65, there are about 5,750 active employees in the UnitedHealthcare insurance plan.

Some retirees have said they were surprised to receive letters about the changes.

Jodi Smith worked for the county for more than 20 years before she took early retirement in 2008. The $200 it will cost to keep Smith and her husband covered on the state plan will be difficult to budget, she said.

"It was a done deal. There was no opportunity for discussion on it," Smith said.

Contact reporter Andrea Kelly at 807-7790 or akelly@azstarnet.com

Newstex ID: KRTB-0014-42236130