Letter: West Virginia state worker retirees raise alarm bells of Biden Medicare Advantage cuts

Originally published in The Parkersburg News and Sentinel

CHARLESTON, W.Va. — While Gov. Jim Justice signed a bill Friday to address future solvency issues in the health insurance plan for public employees, a program that provides health insurance for retired public workers could be facing cuts.

President Joe Biden’s administration has proposed two rules for the Medicare Advantage program, a health insurance option where a private company contracts with Medicare to offer specific Medicare health plans.

Under the first rule, health insurance companies that contract with Medicare to offer Medicare Advantage programs would be required to return overpayments of administration fees to Medicare. The second rule proposes a 2% decrease in payments to Medicare Advantage plans.

Medicare Advantage plans can sometimes offer lower health insurance premiums and more services than a traditional Medicare plan. But Medicare Advantage plans also can have more out-of-pocket expenses, have limited provider networks and be limited by region. (Traditional Medicare works in any state.)

More than 192,000 West Virginians use Medicare Advantage plans for their health insurance coverage.

The Public Employee Insurance Agency insures more than 230,000 public workers and retirees, with some of those on a Medicare Advantage and Prescription Drug (MPAD) plan managed by health insurance giant Humana for Medicare-eligible retired employees and Medicare-eligible dependents of retired employees.

Charmel Radcliff, a retired elementary school teacher in Pleasants County and president of the West Virginia Association of Retired School Employees, wrote a letter March 2 to Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure. Radcliff cited data showing that the proposed cuts to Medicare Advantage plans could result in a $540 decrease in benefits per plan member annually.

“As written, the proposed Medicare Advantage plan payments for next year could result in billions of dollars in cuts to Medicare Advantage,” Radcliff wrote. “Any decreases in payments to plans could mean fewer benefits or higher premiums for more than 30 million Americans, including many retired school employees across West Virginia.

West Virginia public employee retirees are largely on fixed incomes, relying on pension benefits that have not seen substantial increases in years. Just this week, Justice signed a bill providing a one-time $1,500 bonus to state employee retirees age 70 and older. The bonus is for retirees with at least 20 years of service whose monthly benefit is less than $1,000. For state employee retirees with 25 years of service receiving less than $1,000 per month, the bill bumps their benefits up to $1,000 per month.

Still, even with this extra assistance, Radcliff said cuts to Medicare Advantage plans would provide a financial hardship, as well as cause companies offering the plans to reduce services or limit network coverage.

“It should come as no surprise that enrollees are very satisfied with their Medicare Advantage plans,” Radcliff wrote. “In fact, senior voters are overwhelmingly satisfied with Medicare Advantage, and four in five seniors believe it is important for the federal government to protect Medicare Advantage funding. We hear it from our members all of the time. Medicare Advantage provides great, accessible health care for an affordable price.”

Speaking Thursday during a virtual briefing with West Virginia reporters, U.S. Sen. Shelley Moore Capito, R-W.Va., was critical of the White House proposed rule for cutting funding for Medicare Advantage programs.

“The administration wants to cut Medicare Advantage,” Capito said. “The predominant population in West Virginia is on Medicare Advantage. I can speak from experience because both of my parents were on it when they were aging. It works great. It’s more choice. It’s a public-private partnership. We need to look at more things like that, that are cost-containing and are user-friendly. I think that is where the long-term solutions are going to come.”