Advice for navigating the health insurance maze

March 23, 2003|By Gregory Karp | Gregory Karp,SPECIAL TO THE SUN

Searching for health care is likely to be confusing and the cost undoubtedly higher than the Bethlehem Steel plans.

Advice differs depending on whether a retiree is eligible for Medicare, the government's health insurance program for the elderly. And for now, some information applies to members of the United Steelworkers of America and not to salaried, white-collar employees.

Still, some tips will help all retirees.

First, attend an information meeting held by United Steelworkers and the state Department of Aging. Nonunion retirees have held meetings but can attend the other ones, too. In Baltimore County, the union is holding meetings this week at the union hall at 540 Dundalk Ave.

Meetings are scheduled for tomorrow at 1 p.m. (for retirees whose last names start with from A through M) and at 5 p.m. (for N to Z), and Wednesday at 9 a.m., 1 p.m. and 5 p.m. Retirees can participate in individual counseling sessions Wednesday, Thursday and Friday from 10 a.m. to 4 p.m.

Next, assuming benefits are cut off March 31, look for a letter from Bethlehem Steel notifying you that your benefits are terminated. It entitles you to certain valuable rights, so keep it safe.

If you have health benefit claims for medical expenses incurred before April 1, submit them as soon as possible or you might not get paid.

Although benefits will probably end March 31, retirees have time after that to decide on coverage and have it be retroactive to April 1. High-pressure sales tactics to sign up immediately might suggest a disreputable company, experts say.

Retirees ages 55 to 64 can extend health care coverage under COBRA, the Consolidated Omnibus Budget Reconciliation Act. Union retirees can buy coverage for up to six more months and non-steelworkers for two months, though that could be extended.

The company will notify retirees in writing about COBRA and the premium costs. Retirees have 60 days from the date they receive the notice to sign up, and 45 more days to pay the first premium.

Under the federal Trade Adjustment Assistance act, referred to as TAA, retirees can be refunded 65 percent of their out-of-pocket cost for health care premiums. So even a plan costing $1,000 a month would ultimately mean a net cost of $350 a month.

How do you get that refund? For premiums paid through Aug. 1, retirees will probably have to pay the full cost and then claim a tax credit on their 2003 tax return to get the 65 percent back. After Aug. 1, they're supposed to be able to get an advance on the credit, meaning they pay 35 percent.

For the relatively few retirees younger than 55, the news is not good. They'll qualify for COBRA, but not the tax credit. That means they will pay the full load.

Those older than 65 qualify for Medicare, which generally covers hospital costs and doctor services.

They can choose Medigap policies, which are standard, no matter which companies are offering them and are labeled A to J.

Medicare retirees can call as soon as they can to get enrollment kits for such coverage and start comparing plans. About 45 insurers can provide Medigap insurance to retirees and three Medicare + Choice managed care plans, according to the helpful Medicare site on the Internet, www.medicare.gov.

For example, AARP has Medigap plans. An AARP phone number for Bethlehem Steel retirees is 800-392-7537.

Be aware that different companies might charge different amounts for the same Medicare supplement policy. So it pays to compare.

One of the biggest holes in coverage for Medicare retirees is prescription drugs. Those covered by COBRA will continue to get prescription benefits if they had them before. But drug coverage offered by Medigap plans is limited, said Arnold M. Katz, an employee benefits expert and president of Brokerage Concepts in King of Prussia, Pa.

For union retirees, more help might be available from a trust fund set up by ISG, the company likely to buy Bethlehem Steel. The union hopes to strike a deal with ISG to include the retirees in a trust fund that will help pay for some health care costs. ISG has made such a commitment to retired steelworkers from two other companies it took over, LTV and Acme Steel.

Money for the trust will come mostly from a percentage of ISG's profits, but there are no dollar figures or projections, Steelworkers officials say. They do warn, however, that it will fall well short of providing the coverage retirees have today.

Bethlehem Steel is still looking for a pooled insurance plan for all retirees, but there has been little interest from insurance companies, said Dorothy Stephenson, the Bethlehem Steel human resources vice president.

Gregory Karp writes for the Allentown Morning Call, a Tribune Publishing newspaper.

More information

Below are Internet sites and phone numbers to help with insurance options:

Compare Medigap plans: www.medicare.gov/MGCompare/Home.asp

Medicare: 800-MEDICARE, www.medicare.gov

U.S. Department of Veterans Affairs: www.va.gov; 800-827-1000

Maryland Insurance Administration: www.mdinsurance.state.md.us

Maryland Pharmacy Assistance Program: 410-767-5394

COBRA: www.dol.gov/ebsa/pdf/cobra99.pdf; U.S. Department of Labor: 866-275-7922

TAA health insurance tax credit: 877-US-2JOBS.

Baltimore County Department of Aging, Senior Health Insurance Assistance Program: 410-887-2059 or 410-887-2594

Maryland Department of Aging: 410-767-1270

Bethlehem Steel questions and answers: www.bethsteel.com/restructuring/employeebenefits.shtml

United Steelworkers of America Retiree Benefits Watch: www.uswa.org/retireebenefitwatch/

- Morning Call/ Sun research

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