About 12,500 retirees in the state's public school and state employees' health insurance plans have opted out of group Medicare Advantage with prescription drug coverage for this year, choosing to retain their former coverage in the plans, according to the state Department of Transformation and Shared Services' figures.
About 14,400 other retirees in these health insurance plans have been enrolled in the new group coverage, figures from the department show.
These enrollment figures are as of Jan. 30, Department of Transformation and Shared Services spokeswoman Alex Johnston said last week.
Retirees who are 65 or older or who are otherwise eligible for Medicare were automatically enrolled in the group Medicare Advantage program for this year and were given the opportunity to opt out or to retain existing benefits in November.
In mid-December, a few state lawmakers said they heard from retirees who said they turned in forms to opt out of the group Medicare Advantage coverage this year only to later be informed that they will be enrolled in it.
The formal period for retirees to opt out of the Medicare Advantage coverage for this year was in November, but the state's employee Benefits Division accepted forms for retirees to opt out through the end of January.
Johnston acknowledged that 1,102 retirees were initially assigned the wrong coverage before the problem was fixed.
"We've encountered some challenges throughout the opt-out process due largely to the size of the retiree population and the novelty of the new MAPD offering," she said in a written statement.
"In addition to processing forms in the opt-out period, [Department of Transformation and Shared Services' Employee Benefits Division] experienced a large increase in retiree interaction," Johnston said.
The state's Employee Benefits Division continues to work with its partner, United Healthcare Insurance Co. that provides the group Medicare Advantage with prescription drug coverage, to conduct the transition, she said.
As to whether retirees can continue to opt out of the Medicare Advantage coverage this year, Johnston said, "The period in which retirees can opt out of the Medicare Advantage plan was extended through Jan. 31 to accommodate those who had difficulty opting out during the open enrollment period during the month of November.
"Individuals will have an additional opportunity to opt out of the Medicare Advantage plan in the fall of 2023," she said. "In addition, retirees who have opted out will have the opportunity to enroll in the Medicare Advantage plan throughout the year."
According to the Department of Transformation and Shared Services' figures, 3,836 of retirees in the state employees health insurance plan remained in the state's traditional coverage, and 7,414 retirees enrolled in the group Medicare Advantage with prescription drug coverage of Jan. 30.
John Bridges, executive director of the Arkansas State Employees Association, said in a written statement, "We know that the opt-out process was stressful for both sides involved as we were assisting retirees throughout the process, and we commend the employees at the Employee Benefits Division for taking on such a large endeavor with a limited time frame."
"The Arkansas State Employees Association, the Employee Benefits Division and United Healthcare all worked together to make sure every retiree got the information they needed to make an informed decision," he said last week.
"We are no longer receiving phone calls from retirees with issues regarding the conversion," Bridges said.
The Arkansas State Employees Association established a retiree benefits committee several years ago, and it has been monitoring and researching retiree-related issues, such as retirement benefits and health insurance. The group is asking retirees to submit their customer experiences in 2023 with them, so it can compile and present ideas and suggestions to make improvements to the program to the decision-makers, he said.
"Our retiree members are also sharing their customer experiences with United on our retiree Facebook page, and they have all been positive so far," Bridges said. "From all my interactions with retirees, I believe there are a lot of retirees watching from the sidelines in 2023 and will convert to the new plan in 2024."
According to the Department of Transformation and Shared Services figures, 8,665 of the retirees in the state's public school employees health insurance plan remained with the state's traditional coverage, and 7,009 retirees enrolled in the group Medicare Advantage with prescription drug coverage plan as of Jan. 30.
Donna Morey, executive director of the Arkansas Retired Teachers Association, said last week in a written statement the association's board "feels the problems are being handled now."
Asked how the figures for enrollment in the group Medicare Advantage with prescription drug coverage compare with the projections of the state's Employee Benefit Division, Johnston said, "Our expectations were conservative and varied between 30% to 50% enrollment in the Medicare Advantage plan.
"The current enrollment is in line with our expectations, if not better," she said.
Asked whether there is an estimate of the cost savings to the state and retirees, respectively, from the retirees taking the group Medicare Advantage with prescription drug coverage, Johnston said, "The Segal Group [consulting firm working for the Bureau of Legislative Research] estimated significant savings in this regard."
The state's Employee Benefits Division has not completed an analysis of cost savings based on the enrollment in the Medicare Advantage with prescription drug coverage, she said.
The Department of Transformation and Shared Services is currently in the process of selecting a new director for the state's Employee Benefits Division, pending approval of the state Board of Finance, Johnston said.
The division's former director, Jake Bleed, started work as legal counsel at the Arkansas Development Finance Authority on Jan. 16, she said.
Bleed's salary is $140,591 a year at his new job, according to the Arkansas Transparency website. As the Employee Benefits Division director, his salary was $154,492 a year, according to Johnston.
In March 2021, the Department of Transformation and Shared Services announced Bleed's appointment as the director of the Employee Benefits Division at the end of the 2021 regular session, after he served as the state's budget director.
In mid-December, Bleed assured state lawmakers, who heard complaints from retirees about being assigned to the wrong coverage, that "no one in this process will be screwed."
"Keep in mind the [Medicare Advantage] program in my opinion is better than the traditional insurance," he said at that time.
He pointed out that he asked to delay the implementation of the group Medicare Advantage coverage until 2024 to give a full year to roll out the program and to make sure the communication and implementation was effective.
"We were told quite clearly [by state lawmakers], no, we needed to do this now," Bleed told lawmakers in mid-December.
"We have been acting on an expedited basis. I think in a lot of ways we have succeeded. But it is not hugely surprising that we have problems," he said.
Johnston said last week, the transition to the Medicare Advantage with prescription drug coverage has not been affected by Bleed's departure.
In June, the state Board of Finance approved a contract with United Healthcare Insurance Co. to provide group Medicare Advantage with prescription drug coverage for eligible retirees in the state's health insurance plans for public school and state employees.
The Employee Benefits Division is contracting with the firm to offer Medicare Advantage services to eligible employees in calendar years 2023, 2024 and 2025, and additional years can be added upon the conclusion of the initial three-year term, Bleed told the state Board of Finance last year.