Medicare Part D mailing -- CalPERS members should do nothing

California State Retiree newspaper Oct. 1, 2012

CalPERS retirees should do nothing with the letter they received in September asking them whether they want to “opt out” of Medicare Part D, according to CalPERS officials.

CalPERS is converting from the Medicare Part D Retiree Drug Subsidy Program (RDS) to a Medicare Part D Prescription Drug Plan (PDP) for Medicare-eligible members. Blue Shield and CVS Caremark are administering the Medicare Part D Prescription Drug Plan (PDP) for CalPERS effective Jan. 1, 2013, and they are responsible for sending the letters.

 These plans are Employer Group Waiver Plans (EGWP), governed by the Centers for Medicare and Medicaid Services (CMS). The centers require that health plans offer members a choice to opt out of the Medicare Part D Prescription Drug Plan. This opt-out provision was not a requirement under the Medicare Part D Retiree Drug Subsidy Program. 

“Members should take no action to opt out if the member wants to retain their CalPERS Medicare health and prescription drug coverage,” said Ann Boynton, deputy executive officer of CalPERS Benefit Programs Policy and Planning.

The Patient Protection and Affordable Care Act (Healthcare Reform) provides greater reimbursements through the Medicare Part D Prescription Drug Plan. CalPERS was able to pass the cost savings onto its subscribers through lower premiums with no change in benefits. The 2013 Supplement to Medicare plan premiums are 14 to 22 percent lower than 2012 rates because of this program. The co-pay and co-insurance structure will not change.

CalPERS is expected to save between $39 to $44 million by adopting the plan, according to a staff report presented to the CalPERS Pension & Health Benefits Committee in June.

The conversion is only for Supplement to Original Medicare plans.  Medicare Advantage plans, such as Kaiser Permanente Senior Advantage and Blue Shield of California 65 Plus will not be affected.

The change to the Medicare Part D Prescription Drug Plan does not affect reimbursements associated with Medicare Part B.

Further questions may be directed to Blue Shield at (888) 239-6469 and CVS Caremark Member Services at (855) 479-3660.

A FAQ sheet on the conversion is also available on the CalPERS website – www.calpers.ca.gov