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Medicare D loophole causing loss of insurance
Jan 5, 2006

Thanks to AARP backing this convoluted and disastrous Medicare Part "D" plan, Congress included a provision that provided employers with a government subsidy if they provided a prescription plan slightly better than or equal to Medicare Part D for their retired and disabled employees. I became disabled in 1991. I was a vested employee and was eligible for private LTD, but was required to at least apply for Social Security Disability Insurance. After a hearing before a judge, I was awareded SSDI in 1994. I contacted my employer and they told me NOT to sign up for Medicare because I was on their employee health insurance plan. I did have to pay a portion of the premiums. In November, I received a letter stating I was automatically being moved to Medicare and United Health Care, my current private health insurance provider, would be converted into an "indemnity" policy. First, they told me if a doctor (like my specialist) didn't accept Medicare, then once Medicare denies the claim(s), United Health Care would pay 80% of reasonable costs. Today, I learned that that information was wrong. That no matter what, United Health Care will assume that Medicare has paid 80% of my medical costs, even if my physician is not a Medicare provider. Have been looking at trying to obtain other insurance, and have been told down the line that no one will insure me. A friend of mine with Blue Cross told me that if Congress had not passed Medicare D, or at least this provision giving employers this government subsidy, this would likely not be happening to me. And now I see in the Wall Street Journal the following article -- " In order to receive government subsidies, almost four out of five businesses plan to continue providing prescription-drug coverage to their retirees and disabled employees when the Medicare drug program starts next year." So, in order for my employer to collect the government subsidy, they have to keep me on its prescription drug plan, ! I have to turn down Part "D," but be on Medicare B. Of course, this af fects millions of people. According to the same Journal article, "That might change in the next few years, however, as companies find they may save more if they forgo the subsidy and make Medicare the primary provider of prescription drugs for their retired and disabled workers." What can people do to remedy this? Can you recommend an ERISA attorney? Thank you!

Response from Ms. Franzoi

There are many ERISA attorneys across the country. What firm you choose will depend on where you live.

However, the changes to your prior employer's plan (based on the facts provided) appear to be legal. Medicare Part D provides prescription drug coverage. If an employer continues to provide prescription drug coverage to former employees (disabled and retirees), a certain level of subsidy related to those prescription drug costs is available to that employer. Regardles of whether or not Part D became effective, your employer still might've changed the design of the medical plan as it relates to doctor, hospital, lab charges, etc. In fact, most employers who extend coverage to former employee who are disabled, require that they enroll in Medicare and then Medicare becomes primary with the employer's plan being secondary.


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