Town Meeting to decide on Medicare for retirees
By Catie Foertsch Community Reporter

Westborough - October's Town Meeting voters will decide whether to transfer health insurance for eligible retirees to Medicare. That news could have been alarming for those who will be aff ected, but Assistant Town Coordinator Maryanne Bilodeau has been working since July to make sure it isn't.

Through group meetings and individual letters, she's been making sure those who would be aff ected won't feel blindsided, and fully understand what will happen to their coverage if Town Meeting approves the change, which would save the town upward of $200,000 per year.

To be eligible for Medicare, an employee must be 65 or older and must have paid into the Medicare system for 10 years themselves or have a spouse who did. Currently, most seniors who are eligible have opted to stay with their town-sponsored health insurance plans. If the town approves the change, 19 individual plans and 19 family plans would be shifted to Medicare.

Those who are eligible receive Medicare Part A, which covers hospitalization, at no cost. Medicare Part B, which covers physician visits and other non-hospital care, costs seniors $93.50 per month. Senior plans, which supplement Medicare Part B, cost seniors between $45 and $119 per month.

Bilodeau said the impact for seniors who would be transferred to Medicare would range from a savings of $93 per month to an increase of $66 per month. But, she said, those who wind up paying more would have a better plan that would reduce their co-pays and deductibles.

Reasons to switch

While the town could have made the change years ago, it didn't make sense, Bilodeau said, because few were affected and those few would have had to pay much more per month for their supplemental coverage. But several factors have come together to make this the right time to switch.

First, the cost of senior plans has been increasing at a much lower rate than regular health insurance plans. While Medicare and a supplemental plan used to be much more expensive than staying on a regular plan, the cost is now roughly the same.

Second, the town has been paying into the Medicare system each year but receiving no benefits. Last year the town paid $470,000 to Medicare, and its employees paid the same amount.

"It just doesn't make sense to pay into a system our retirees are not taking advantage of," Bilodeau said.

Third, by transferring eligible seniors to the Medicare system, the cost for health insurance for town employees will go down because seniors tend to use their health insurance more than younger people, and removing higher-use members from the pool will lower the cost for those who remain. Bilodeau estimated that the savings in the health insurance budget would be between 2 and 10 percent. The town's health insurance budget for the current fiscal year is $8.1 million, and a 2 percent reduction would mean the town would save $162,000.

Fourth, the town will save more money because it will be paying more of the lower premiums for senior plans, and less of the more expensive premiums for regular health plans. Bilodeau said the worst-case scenario would be if all eligible seniors chose the most expensive senior plan, and under that scenario the town would save $54,000.

Finally, Westborough currently buys 312 health insurance plans for retirees and their spouses, and 516 plans for active employees. The town and its employees started paying Medicare taxes in 1986, and each year more and more of those who retire will be eligible for Medicare. Thus, Bilodeau said, the savings for the town would continue to grow.