4th Quarter 2012 Benefits Corner

Benefits Corner  

     By Al Horan, Chair, CRA Benefits Committee 


In this article I will be covering “What’s on the Horizon” for our Chevron benefits  plans; then I will look at what’s happening at the Government level with our benefits; and finally I will cover what’s happening in the medical field.

Our Chevron Benefits Plans

Let’s start by looking ahead to Chevron’s Open Enrollment for 2013 for their Medical and Dental Plans. Based on advice from Chevron, Open Enrollment will be held between October 15th through October 26th. An Open Enrollment package will be mailed to retirees on or about October 5th. The package will contain a Retiree Newsletter, an Open Enrollment Worksheet, a Medicare Part D coverage notice (if applicable), and a Summary of Benefits & Coverage (SBC) for Medicare participants. SBCs provide summary information about your health plans, such as benefits, copayments, deductibles, coinsurance and plan contact information. You might notice some plans have SBCs that use a different format from past years. That’s because these plans use a new pre-designated format mandated by provisions of the health care reform law. 2013 SBCs for all health plans are available free of charge online at hr2.chevron.com or by calling the HR Service Center at 1-888-825-5247 (inside the U.S.) or 1-610-669-8595 (outside the U.S.), option 2.

Chevron also advised that they do not expect significant changes to the benefit provisions of the Plans nor do they expect any change in eligibility requirements to join a Chevron Plan. Further, at this time member contributions for 2013 have not been made available to us. However, we need to remember that member contributions are a function of claims experience and the Company’s contribution. (Chevron’s maximum annual increase in their contribution is 4%). Under the Affordable Care Act, anyone who participates in a HMO plan may be eligible for a premium refund if the insurer does not spend 80% to 85% of premiums on the direct care of patients, including efforts to improve the quality of their health. Insurers are required to rebate excess premiums if they fail to meet these standards. This change currently applies to pre-age 65 HMO participants and beginning in 2014, it will also apply to age 65 and older HMO participants. Chevron reported that none of their pre-age 65 HMO plans generated a refund for 2012. It should be noted that this provision of the Affordable Care Act does not apply to Chevron’s non-HMO Medical Plans because they are self-insured.


In deciding which Plan to join for 2013, you may wish to consider the following: (a) the state of each participant’s health; (b) the amount of medical care you each received over the last 12 months; (c) any anticipated medical care each of you expect to receive in 2013; and (d) each participant’s age since there is a greater chance of unexpected medical problems at advanced ages. In doing your review, you may wish to consider that, to the extent you are eligible, Chevron’s Medicare Plus Plan provides the maximum level of benefits for Medicare participants and Chevron’s Option 1 Plan provides the maximum level of benefits for non-Medicare participants. Please note, Chevron mentioned that generally only about 10% of participants change their coverage. If you decide that you are satisfied with your existing coverage you will not need to do anything. You will be automatically reenrolled in the same Plan for 2013. Lastly, if you haven’t already done so we strongly encourage you to make arrangements with Chevron’s Service Center to have your monthly premiums automatically deducted from your bank account.

In concluding this section, I would like to remind everyone that on October 1st Medco’s website, communications and literature changes to Express Scripts. The Medco website address is changing to www.Express-Scripts.com.  However, www.medco.com will continue to work for an indefinite amount of time.  If you use the www.medco.com address after September 30, 2012, you will automatically be sent to the new Express Scripts landing page.  Their phone numbers remain (800) 935-6215 for Medicare members and (800) 987-8368 for non-Medicare members; and their participating pharmacies remain unchanged. You should continue to use your current Medco ID card, as there is no need, at this time, to issue new ID cards.     

Government Benefit Plans

When Medicare was enacted into law in 1965 it only provided indemnity benefits. Then in 1997, it was amended to allow participants the choice of traditional Medicare benefits or alternatively a Medicare Advantage plan – a HMO. The Government believed that an Advantage plan would provide participants with better medical care at lower costs. As an inducement to get traditional Medicare participants to switch to a Medicare Advantage plan, Medicare Advantage insurers received, on average, about $1,000 more per person than traditional Medicare. It was expected that this would translate to lower costs for everyone, including the participants. However, for various reasons this did not prove to be the case.

Now, the Affordable Care Act levels the playing field between traditional Medicare and Medicare Advantage plans by eliminating the subsidy that was paid to Medicare Advantage insurers. The subsidy was financed by the Government and all Medicare participants. This change potentially affects 12 million Medicare participants who are covered by Medicare Advantage plans. In total there are approximately 50 million Medicare participants. Logically one would expect that by leveling the playing field, participants of Advantage plans would see their premiums increase, their benefits decrease or a combination thereof. Much to my surprise, so far this has not been the case. In February, the Government reported that Medicare Advantage premiums are down 7% on average, enrollment is up 10% and the quality of care under Advantage plans is improving. These statistics may be showing that through achieving cost efficiencies in delivering care and by perhaps attracting new healthier members, Advantage plans have been able to reduce costs.

Ideally, I would have also liked to cover what will be happening in 2013 with our Medicare premiums and deductibles; and whether there will be a Social Security cost of living increase in 2013. However, at the time of writing this article this information was not available. As soon as it becomes available I will advise your Chapters and, most likely, it will also be posted on our website - www.chevronretirees.org. You may wish to check with your Chapters or our website for this information in about 6 – 8 weeks.


The Medical Field

Two of the objectives of the Affordable Care Act are to reduce costs and improve the quality of health care. On the surface, these sound like an impossibility. Yet, as I mentioned earlier, Medicare Advantage premiums are down 7% on average and the quality of care is improving. According to the Institute of Medicine, the nation’s health care system is

overpaying at least $210 billion a year for overtreatment of patients – too many scans, blood tests and procedures. Here are two examples of how medical organizations have been able to lower costs and improve care.

·         The Geisinger Health System in Pennsylvania is testing the following proposition: By employing the best practices in medicine with a team approach, it is possible to improve the quality of care while reducing its cost. This approach involves the patient, the doctor and a nurse care coordinator. The nurse care coordinator maintains continuous contact with a patient who has a chronic disease by intervening and arranging for the appropriate level of care before the patient’s condition worsens and requires extensive treatment. An example is an 80-year-old woman who is prone to bronchitis that once spent 29 days in a hospital’s intensive care unit fighting pneumonia. By maintaining contact with the lady and arranging for appropriate care her condition has not worsened nor has she needed hospital confinement. In addition to the handling of chronic conditions, Geisinger also offers fixed-price hospital procedures, including bypass surgery, which come with 90 day warranties. They have been able to offer fixed-price procedures because of uniform adherence to best practices. The results have been excellent – mortality rates dropped to 0.5%, medical complications fell by 10%, the cost of the procedures fell by 5.2%, and insurers saved $250,000 on readmissions.  

·         Partners HealthCare in Massachusetts have ten hospitals and employ 60,000 employees and 6,000 doctors. Like so many other organizations, they found their costs soaring, their level of service to be typically mediocre, and their quality of care to be unreliable. To correct these deficiencies they embarked upon standardizing procedures, including the aftercare of patients. This change included having surgeons use a single manufacturer for 75% of joint implants. These changes resulted in vastly better outcomes for patients, which meant quicker recoveries with less pain. In addition to standardizing procedures, they introduced a remote ICU unit which helps monitor ICU patients in their hospitals through closed circuit television. The doctors and nurses that run the remote unit are there to help monitor standards of care and to be there to collaborate with the attending physicians and nurses. With these changes in care, the organization entered into new contracts with Medicare, Blue Cross/Blue Shield and other insurers where their financial rewards are linked to their clinical performance. The measures of performance include agreed upon targets for quality improvements and cost reductions. In spite of these changes, Partners recognizes that good medicine cannot be reduced to a recipe. Therefore, adjustments are made in the prescribed protocols as necessary based on the facts and circumstances of individual cases.

Irrespective of the changes and advances in medicine, the long-term solution to rising medical costs and the quality of care lies in preventative care. Please remember Medicare and Chevron’s Medical Plans cover most preventative screenings, services and vaccines; and generally they are reimbursed at 100%. However, to be sure that a screening or service is covered you should check with Medicare and United Healthcare or other provider of your Chevron coverage. In addition, if you are being treated for a medical condition please be sure to follow your doctor’s advice.

Finally, here are a few tidbits that I picked up from different sources:

·         Drinking a cocoa-rich beverage every day may help brain health in older adults. (Source: Anthem Blue Cross, WebMD)

·         People who are overweight when they are diagnosed with type 2 diabetes appear to live longer than people whose body weight is normal when the disease is detected. (Source: Anthem Blue Cross, WebMD)

·         The drug, Egrifta, that’s been approved by the FDA for use in HIV patients may also help slow the decline of memory and mental function experienced by people who are in the early stages of Alzheimer’s disease. (Source: Anthem Blue Cross, WebMD)

·         An excellent source for information about wellness and various medical conditions is United Healthcare’s website - www.myuhc.com.

·         The Centers for Disease Control and Prevention is recommending that all “Baby Boomers” (born between 1945 and 1965) be screened for hepatitis C – a liver destroying disease.

·         If you receive a new medication (pill) and you wish to check what it should look like, AARP has a pill identifier on its website – healthtools.aarp.org/pill-identifier. Alternatively, you should phone Express Scripts.

If you have any questions please let me know.    


Al Horan, Benefits Chair, Phone: 972-964-1787 Email: awhoran@verizon.net