Move to Medicare can be painless for GM retirees

BY MEGHANA KESHAVAN and PATRICIA ANSTETT
http://www.freep.com

General Motors retirees facing the loss of their top-flight health coverage should shop around aggressively to save money on Medicare coverage, say Ford retirees who went through the same thing last year.

It’s actually possible to save money, despite losing a generous, company-backed health plan and having to pay to supplement Medicare coverage. A big part of the reason is a payment the auto companies are giving retirees in place of their coverage.

“Last year, we were going through the same thing at Ford. Felt like someone stabbed you in the stomach,” said Fred Roperti, a salaried Ford retiree. “But it turned out well. I was actually shocked at how reasonable it was.”

John Pottow, an associate professor specializing in bankruptcy law at the University of Michigan Law School, said many other retirees could face the same choices in the coming years.

“If you look at teachers, cops, people in the auto sector, many workplaces promise health care benefits into retirement,” he said. But employers can’t “afford the exorbitant promises they make. … There’s no way that no-paid, zero-percent premiums will survive.”

Roperti advises people to get through the initial shock and carefully shop around. He said he has saved more than $600 a year out of pocket in his first year with a Blue Care Network Medicare plan.

Roperti, 76, has served for the past eight years as Salem Township supervisor and draws a pension from his 26 years as an engineer at Ford Motor Co.

“I did a little side-by-side comparison of the plans, and I can’t really complain,” he said.

Roperti, a widower, takes three medications daily for his heart, following bypass surgery a few years ago. He said his new plan covers his prescriptions, in addition to dental, vision, rehabilitation, chiropractic and medical costs.

In a meticulously organized black binder that characterizes his approach to the problem, Roperti kept a log for the last year of all his health expenses. In 2007, with Ford’s insurance, his out-of-pocket expenses were $1,270. This year, he calculates that he will spend $2,408, but he gets $1,800 a year from Ford in place of the paid insurance plan. With that subsidy, he expects to save $662 compared with last year’s expenses.

• He uses the Medicare Part B plan, which is now $96.60 per month out of pocket, or $1,157 per year — a cost previously covered in full by Ford.

• For supplemental medical insurance, in 2007 he paid $31 per month, or $372 yearly. This year, he paid $26.60 per month, or $319 yearly.

• His dental co-pay remains $250 per year. He paid a total of $48 for dental insurance in 2007. Now he pays $36 a month, or $432 yearly.

• He estimates his doctor co-pays this year at $100, the same as the year before.

• With Ford, Roperti spent about $500 on prescription drugs, whereas with his Blue Cross plan, he spends about $150.

Extend Health, a San Francisco company working with GM to help the 97,000 affected retirees find affordable Medicare plans, will not have precise cost comparison numbers for retirees until September. Bryce Williams, Extend Health president and chief executive officer, said the company is “doing some dramatically improved things from last year,” when it helped Ford retirees.

The window to enroll has been extended a month, beginning Oct. 15 this year and lasting until Dec. 31. The company is doubling the number of phone representatives and will personalize assistance so that retirees can contact the same person each time they have a question.

Representatives will instruct the children, grandchildren or caregivers of retirees who may not be able to help with the choices.

Medicare specialists at the Michigan Medicare/Medicaid Assistance Program say that seniors can find affordable plans if they do their homework.

Jo Murphy, executive director of the program, which provides free help for people who want to compare and enroll in Medicare plans, said that seniors have nearly 250 Medicare plan choices.

But by the time they factor in key issues — the prescription drugs they take, whether they want to stay in a network of their current doctors and whether they spend more than one month a year away from their Michigan residences — the choices may narrow to two or three.

She advises retirees to consider buying a Medicare Supplemental policy along with a Medicare Part D prescription plan, or a Medicare Advantage plan, which offers comprehensive prescription drug and doctor visit coverage, at a cost of about $150 a month for the two plans.

But Lou Isabell, an insurance broker who runs All Choice Insurance, a large Northville agency, warned that Medicare Advantage programs and Part D prescription programs can be costly, so it’s important to compare plans, particularly when a person travels extensively. “It’s critical that they know what their out-of-pocket expenses will be,” said Isabell.

Contact PATRICIA ANSTETT at 313-222-5021 or panstett@freepress.com.

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