Pat Klein, assistant director for external affairs for the Arizona State Retirement System, focuses primarily on the immediate effects on retirees when explaining the differences and similarities of the health care plans for state retirees and the federal health care law.
The federal law, which takes effect Sept. 23, establishes a national high-risk health insurance pool to provide affordable coverage until Jan. 1, 2014, to uninsured people with pre-existing medical conditions.
Meanwhile, state retirement system retiree health insurance programs allow enrollment for any qualified retiree with no restrictions to those with pre-existing medical conditions.
“We already cover pre-existing conditions,” Klein says. “We decided there would be no limitations on pre-existing conditions several years ago.”
The federal law mandates coverage for dependent children until they reach the age of 26.
The state retirement system allows coverage extension to dependent children through age 25, a slight difference when compared to the federal law. But, it gets a little complicated.
“Actually, we’re one month shy,” Klein says. Although there are no federal rules yet, 26 could mean the first of the month that someone turns 26, their actual birthday, or the last day of the month. ASRS takes the position that it’s the last day of the month. “We’ll have to add a month,” Klein says, “but it’s a non-cost item.”
The federal law eliminates lifetime limits and bars canceling coverage except in cases of fraud.
Klein says this provision will have a positive impact for state retirement system retirees enrolled in the Senior Supplement and non-Medicare PPO plans. Existing limits to coverage on these state retirement system plans range from $2 million to $5 million in lifetime coverage, although historically lifetime limits have rarely been an issue for retirees.
Those limits will be removed starting next year, Klein says. ASRS retirees enrolled in the non-Medicare HMO and MedicareComplete plans already have no lifetime limits.
“We don’t anticipate it being significant in terms of premium changes to retirees,” Klein says. He adds that any retiree who requires that much medical care probably “is not long for this life.”