Retirees should keep `free pass' for drug plan

FEDERAL WORKERS

November 04, 2005|By MELISSA HARRIS | MELISSA HARRIS,SUN REPORTER

Retired federal workers are being inundated this month with literature on Medicare's new prescription drug benefit, and experts who look out for these folks say that most of it is junk - except for one thing.

This month, the Office of Personnel Management will mail most federal retirees a certificate stating that their prescription drug benefit is as good as or better than the one Congress created for all seniors two years ago.

Any retiree, not just a former federal worker, who gets this certificate needs to keep it. It is like a get-out-of-jail-free card.

FOR THE RECORD - Because of inaccurate information provided to The Sun, the "Federal Workers" column in Friday's Howard and Anne Arundel sections incorrectly described the source of the certificate stating that an individual's existing prescription drug coverage is as good or better than what the federal government will offer that worker next year. The certificate will come from the retirees' health insurer.
The Sun regrets the error.

Here's why: The success of the drug benefit hinges on as many people as possible signing up for it from the start, and there are penalties for people who sign up at a later date - that is, unless you have the previously mentioned certificate.

Civilian federal retirees who get one in the mail should not enroll in the new drug plan. It would cost more money each month for a benefit that is inferior to the one they have.

But Dan Adcock, assistant legislative director for the National Association of Active and Retired Federal Employees, said the situation could change.

Congress could cut prescription drug benefits for government retirees, making the new benefit more attractive. Then, the certificate would come in handy.

Adcock said that other literature from the Office of Personnel Management and the retiree's health care provider also should be saved, but ads trying to sell the drug benefit should be tossed.

"Companies buy mailing lists that are sorted by age, so they hit everybody," said Ronald Bowers of Timonium, a retired Social Security Administration employee and the former president of the Maryland Federation of the National Association of Active and Retired Federal Employees. "I have to throw all kinds of trash out."

No subsidy

The Office of Personnel Management passed up a subsidy this week that could have reduced future increases to federal retirees' health insurance premiums.

"They just ticked off nearly 4 million people who vote in very large numbers," Bowers said.

When Congress considered its new prescription drug plan in 2003, many people warned legislators that offering such a benefit would lead private employers to drop their coverage.

Why provide retirees a costly, Cadillac benefit when the government can provide them a Buick-type one at a low cost? Congress built an incentive - this subsidy - for employers to keep the coverage. Theoretically, as employers faced rising health insurance costs, the subsidy would cover a portion of the premium increase passed on to consumers.

Federal workers wanted that perk, too, and successfully lobbied Congress for it. But this week, the Office of Personnel Management opted not to take advantage of it, arguing that it does not make sense for the federal government to subsidize itself or simply transfer money from one account to another.

Workplace-rules suit

A coalition of unions will file a lawsuit against the Defense Department within the next two weeks over its new workplace rules, a lawyer for the American Federation of Government Employees said.

The new rules would take effect Nov. 28, but the first round of employees set to fall under the new pay-for-performance system, including more than 4,100 people at the Washington Navy Yard and Patuxent River Naval Air Station in St. Mary's County, would not do so until February. The first raises under the new system would start the following year.

Although that is the plan, it will be up to the judiciary to decide whether all of it becomes reality.

"The rules are mission essential," said Larry Orluskie, a spokesman for the Department of Homeland Security.

The lawsuit, against the Defense Department, similar to a fight between workers and the Department of Homeland Security, will focus on allegations that the rules amount to little more than union-busting.

Federal Workers can be reached at melissa.harris@baltsun.com or 410-715-2885. Back issues can be read at baltimoresun.com/ federal.

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