Today the Newton Public Schools Human Resources Office shared a letter from Mayor Ruthanne Fuller regarding changes to health insurance. This has many of you worrying about what they will mean for your coverage and costs next year. Let me share some of what we know and what we don’t yet know about the changes, presenting to you the good, then the bad, and the ugly as I understand.
As president of the NTA, I am co-chair, along with Jay Babcock, president of the Newton Police Superior Officers Association, of the Insurance Advisory Commission (IAC). The IAC includes representation from all city and school unions. As co-chair, I have been involved at critical steps in the city’s process of choosing a health insurance provider. Near the end of this process, the IAC unanimously recommended to Mayor Fuller that the City of Newton adopt Blue Cross Blue Shield as its insurance provider beginning on July 1. Both Jay and I were convinced that Blue Cross Blue Shield will provide excellent service and coverage with minimal noticeable changes or transition pains. We came to the conclusion that they are clearly the best option for the employees of the City of Newton and the Newton Public Schools beginning this July.
For active employees, and for retirees who are under 65 or are ineligible for medicare this means:
Our insurance coverage will now be provided through Blue Cross Blue Shield. Harvard and Tufts plans will no longer be offered.
We will still have the option of coverage through an EPO/HMO type plan or a PPO plan.
Because the Blue Cross Blue Shield network is very comprehensive, everyone should have access to the providers they see now.
Co-pays, deductibles, and out-of-pocket maximums (“plan design”) will not change.
Blue Cross Blue Shield will honor any prior authorizations members have for prescriptions or other forms of medical care,
Contribution percentages will not change—if you are currently paying 20% of your premium cost, and the NPS is paying 80%, that will not change; if you are currently paying 25% of your premium cost, and the NPS is paying 75%, that will not change.
Blue Cross Blue Shield will provide excellent customer service. In fact, it is notable for the quality of its customer service.
For retired employees on medicare supplement plans
Blue Cross Blue Shield will offer a supplement plan (Medex 2) that is very similar to the Tufts Medicare Complement Plan used by the majority of medicare eligible employees. The major difference is that under the Blue Cross Blue Shield plan, retirees will no longer have to pay co-pays for doctor visits.
Please note that the Blue Cross Blue Shield Advantage Plan that the district currently offers retirees and is described on its website IS NOT the Blue Cross Blue Shield supplement plan that will replace Tufts Medicare Complement.
The cost of premiums for the Medicare Supplement Plan will decrease significantly—enough to reduce the retiree cost of premiums by about $636 per year, as Mayor Fuller states in her email. Bear in mind that the prior to the Mayor’s announcement, the city had planned on increasing premiums by 5%. So this is a very significant savings. (And bear in mind as well that for every retiree on a medicare supplement plan, the City and/or NPS are saving 4X that amount, because they contribute 80% to retiree premium costs.)
The City of Newton currently reimburses retired employees on medicare supplement plans for part of the cost of medicare part B--$925 per year. The Mayor stated in her letter her intention to phase out these reimbursements over the next two years. The effect of this will be to absorb all of the savings retirees will realize from lower cost premiums.
This was a unilateral decision made by Mayor Fuller, and while she indeed does have the legal prerogative to make this change, it feels to the members of the IAC like a betrayal of our trust. When we made the recommendation to the Mayor that the city adopt Blue Cross Blue Shield as its health insurance provider beginning next year, this was not part of a “deal” to eliminate medicare part B reimbursements. Municipal and school employee pensions, unlike social security pensions, are adjusted very little for inflation—only $360 per year. Many retirees count on this $925 reimbursement to make ends meet.
I think this is a particularly bad precedent. What might be next? The city only has a legal obligation to contribute a minimum of 50% towards retiree health insurance premiums. I worry that as the city and schools face increasing financial pressures, this could be the next place city officials look to reduce the benefits they offer retirees—with no legal obligation to bargain the changes.
Active employees, and retirees under 65 or retirees who are ineligible for medicare will all face an increase of 13% for FY2024 in health insurance premiums. Worse, there is a good deal of uncertainty about how this will play out. Currently Tufts EPO subscribers pay higher premiums than do Harvard HMO subscribers, even though the plans are identical. It is likely that, as the premium rates are set, we will see that current Harvard subscribers will actually face more than a 13% increase in their premiums next year, while Tufts subscribers may see less than a 13% increase in their premium rates next year. However this plays out, this is a very large increase in health insurance premiums from one year to the next.
The IAC made its recommendation to Mayor Fuller on March 28, but we did not hear back from her office for over two weeks, and even then, we had to reach out to her office because we were hearing rumors that the HR offices of the city and schools were working together to make the transition to Blue Cross Blue Shield. WE were not contacted directly about the mayors decisions.
That was not how we anticipated things would go. We thought that before making an announcement to the wider city through her public emails, or to employees through their respective HR departments, that Mayor Fuller would first share her decision with the city’s union leadership, and work with us on how to communicate with our members. Instead, union leadership was simply informed of the the Mayor’s decisions the same day she made them public. And Mayor Fuller's announcements lead to a great deal of anxiety among both active and retired employees.
We also learned, on the day Mayor Fuller made her announcement, that she was also making a number of unilateral changes that were not shared with us when we made our recommendation to work with Blue Cross Blue Shield
When the IAC’s recommendation was sought, we were told that ALL premiums would go up 5%, as originally projected, and that any shortfalls in funding would come from the city’s insurance trust fund. That is a far cry from the 13% or more premium rates will increase for members on active plans.
We were not informed that the medicare part B reimbursement would be eliminated.
It isn’t clear yet, but looks as though the City also plans on eliminating the CanaRx program. We will see. But this is a benefit bargained for and protected by our contract. We do not believe that, contractually, the city can eliminate this program, at least for active employees who are covered by the contract, and we will certainly enforce the contract and protect that benefit.
Personally, I think it is a shame that the Mayor abandoned the collaborative work that we had been doing right at the very end of the process. That said, I remain convinced that transitioning to Blue Cross Blue Shield is the best option for the members of the NTA. But the waters of this transition have been muddied by poor communication, lack of collaboration, and unfortunate late, harmful, and unilateral decisions that are damaging both in their direct impact, and their implications.