State Budget Update – Medicare B

              Before the start of the new State fiscal year on April 1, 2010, both houses of the Legislature recessed for the religious holidays of Passover and Easter.  Their published legislative schedule calls for the Legislature to reconvene on April 7, 2010.  However, before their recess, the Assembly and Senate took two significant actions.

              Both houses passed an emergency spending bills submitted by the Governor to keep State government running on a temporary barebones basis for a few weeks.  State employees will be paid on time and bondholders will get the interest due on State bonds that they hold.  There even was some appropriation for a minimal level of purchasing.  These authorizations will need to be renewed until a State Budget for the 2010-2011 State fiscal year is enacted.

              More significantly, before they left Albany each house of the Legislature passed its own “budget resolution” which basically amounted to each chamber’s response to the Governor’s proposed Executive Budget for the new fiscal year.  This proposed Executive Budget had been submitted by the Governor in January and contained appropriations and proposed legal amendments that would create savings in State spending to fill an almost $9 billion budget deficit.  These ‘budget resolutions” provide some insight into the negotiating positions of the Senate and the Assembly with respect to the Governor’s budget proposal.

              In our last newsletter, we highlighted the Governor’s proposal to chargeback the cost of Medicare Part B premium reimbursements for enrollees in the New York State Health Insurance Plan (NYSHIP).  When a plan participant reaches the age to become eligible for Medicare, he or she must enroll in Medicare and must pay the federal premium for such enrollment.  Under Section 167-a of the Civil Service Law, these premiums are reimbursed by our former employers at their own cost.  The reason for this law requiring reimbursement was that our enrollment in Medicare saved the State a lot of money and we are forced to use Medicare as our primary provider.  As enrollees in NYSHIP, retirees still pay the same premiums as active employees for their health insurance coverage, whether or not they must use Medicare as their primary provider.

              By amending this law, the Governor is proposing to save the State more money by not only collecting health insurance premiums from retirees, but also having retirees bear a proportionate share of the cost of the Medicare premium reimbursements.  We labeled this sleight of hand a “Medicare Tax” and have been fighting to eliminate it from the final budget.

              Because of their ‘budget resolutions,” we now know that the Senate has rejected this chargeback of Medicare premium reimbursements to the cost of our health insurance.  However, the Assembly has unfortunately accepted the Governor’s proposal, only clarifying the language of the amendment to make sure plan participants pay for the same proportion of the Medicare reimbursements as we pay for our total health care insurance coverage.

              Obviously, RPEA members are happy with the Senate’s position and oppose the Assembly’s position which would add more of a financial burden to the cost of our health insurance at a time when health insurance costs are spiraling higher than normal economic indicators.  The Assembly’s acceptance also sets a dangerous precedent that it’s OK to make us pay more than once for the same health insurance coverage.  One can see through the ruse of reimbursing us for Medicare premiums that we pay and then charging us for the cost of such reimbursements!

              Every RPEA member should react accordingly by thanking their Senator and asking them to remain firm in their rejection of this money grabbing scheme.  And, we should express our disapproval to our Assembly members by visiting, calling or writing them before any further budget negotiations get underway to get them to reverse their position.

              Our Community Lobbying Committees have been alerted to redouble their efforts to respond to these legislative actions!  We need every RPEA member to help in this effort!

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        One of RPEA’s legislative priorities, the third party notification bill, was reported from the Senate Insurance Committee after it Chairman, Senator Neil Breslin (D, Albany), agreed that this is an important measure to protect senior citizens.  Senator Breslin scheduled the bill for consideration and the bill was reported to the floor calendar in the Senate.

        The bill expands the requirement that insurance companies must allow health insurance policy holders over the age of 65 to designate a third party to receive any notification of cancellation with respect to such health insurance policy.  The bill repeatedly passed the Assembly, but was never considered by the Senate.

        President Stan Winter met with Senator Breslin and explained how important this bill would be to protect public employee retirees who may not be aware of insurance company notifications due to infirmity or because they travel in the winter and the mail is delayed.

        We thank Senator Breslin for his efforts at getting the Senate to consider the bill.  The Assembly bill, A.217, Latimer, was substituted on the Senate Third Reading Calendar for the Senate companion bill where it awaits a final Senate vote.  After it’s passage, it would then be delivered to the Governor for his approval.