Statement of the AEVC Steering Committee Concerning Proposed Changes to the College's Retiree Medical Plan

September 14, 2010

Dear Colleagues:

I am writing you on behalf of the AEVC steering committee concerning the recently proposed changes to the College's Retiree Medical Plan as outlined in Leslie Power's letter of August 25. We have attended the two meetings Leslie called to review those changes (Sept 2 and 8) and have discussed, among ourselves, the merits and weaknesses of the plan proposed by the Vassar Administration. All of us acknowledge the rising costs in insurance premiums faced by Vassar and its retirees. All of us also acknowledge that those premiums will continue to increase in the years ahead, putting further strain on both Vassar's budget and our own. That is the troubling context in which the College has decided to end Vassar's present model of providing medical insurance for retirees and to adopt a radically new one.

Although the steering committee is significantly divided on a number of the issues, we want to share with you some of the concerns these proposed changes have raised.

1. Process

• The retiree community only learned of this very significant change in late August when many retirees were away from Vassar or their place of residence.
• While the details of the new plan may be subject to minor revision, the fundamental structure of the proposed changes no longer seems open to review.
• Thus, we are being asked to implement a plan in whose design we had very limited say (and that, when broached in meetings several years ago, met considerable resistance from retirees).

2. Fundamental Change in Concept and Expectation

• When the vast majority of living retirees left Vassar's service, they expected to receive their supplementary medical insurance through a single comprehensive Vassar plan that provided medical security for them and their spouse or domestic partner.
• Under the new plan proposed by the College, that expectation will no longer be met. While Vassar will provide graduated subsidies to cover their medical expenses, each retiree (and spouse/partner) will now have to purchase at least two supplementary insurance policies in the private insurance market. Given what is at stake in these choices and the understandable suspicion of for- profit insurance companies, this change of approach, while it may be unavoidable for reasons of cost, is an unwelcome new burden that now includes: researching and choosing several private insurance policies, struggling to have them fairly administered by different insurance companies, as well as having to choose new policies as medical conditions change.
• These burdens will be particularly onerous for elderly and infirm retirees, as well as those who live at a distance from Vassar, or who are unaccustomed to using the Internet as an instrument of commerce. Special attention and assistance should be given by the Benefits office to each of these groups in the conversion process to the new plan.

3. Medical and Drug Coverage

• The arguments advanced by Leslie Power in her letter in support of MEDIGAP F as the best available replacement for our existing supplemental medical coverage seem reasonable. However, the adequacy of Medicare D as the proposed replacement for our existing drug coverage is more problematic. There are several pitfalls to watch for and plan around as you make your personal decisions: 1. the actual cost of the MEDICARE D premiums, which vary considerably without clear rationales ; 2. the required co-pays for the non-generic drugs your doctor has prescribed, which also vary from plan to plan; 3. the fact that new medications may be suddenly prescribed which your existing plan wasn't designed to cover; 4. the infamous “donut hole” that you will enter if the cost of your drugs exceeds a prescribed cost limit and before you re-enter a zone of safety at a higher cost level.
• Thus, you will need to review carefully the suitability and adequacy of your prescription drug plan both now and on an annual basis.

4. Enrollment Assistance

• The Benefits Office has promised to provide both additional explanatory material and significant personal counseling between now and January 1 when the old plan expires and the new choices need to be made by you and your spouse/partner. We STRONGLY encourage you to contact Leslie Power (845-437-5851; lepower@vassar.edu) or Patti Jo Renaud (parenaud@vassar.edu; 845-437-7761) to schedule an appointment so that you may receive the information and guidance you need to choose wisely in this critical area. Please do this soon before the pressure of the deadlines and the crush of the holiday season make personal scheduling difficult. Leslie's office can also advise you how best to secure relevant information and guidance online. (Links to online resources will also be posted on the AEVC website in the Medical Insurance section.)

5. Future Contributions

• While some passing assurances were given that the College would review yearly rises in insurance costs for MEDIGAP and MEDICARE D coverage and would increase its contribution appropriately as the average cost of the premiums and the co-pays increases, we will ask the College to commit to such a review and adjustment as a matter of policy.

6. Uncertain Effects on Present and Future Retirees

• One of the major incentives leading emeritae/I to retire from Vassar was the guarantee of secure medical insurance. It will be at least several years before we know whether this new approach to medical insurance coverage is a fair and reasonable replacement for our current plan. We urge you to contact us, the Benefits Office and the Benefits Committee with the full range of your actual experience under this new design. Major changes of this magnitude invariably have unforeseen consequences. You are collectively in the best position to detect and reveal them when they occur.

Conclusion

After reading Leslie Power's letter, attending the recent information sessions, speaking with Jesse Kalin and drawing on our prior experience on several different compensation committees, we believe the College will proceed in adopting this very different approach to retiree medical benefits. While we as a group are not of one mind in appraising this very important change, we have tried to identify for you and the relevant College officers where we think the plan is vague, flawed or unfair. We've also tried to alert you in advance that the time between now and Jan 1 when the old plan expires and your new choices have to be made is very short. Please make the very best use of this time and the special assistance provided by the Benefits office. The security of your medical insurance coverage depends on it.

Sincerely,
Michael Mc Carthy
For the AEVC Steering Committee
Betty Daniels, Jesse Kalin, Harvey Flad, Glen Johnson, Michael Mc Carthy