1st Quarter 2013 Benefits Corner

Benefits Corner      
      By Al Horan, Chair, CRA Benefits Committee




It’s hard to believe but both another year and Open Enrollment are behind us. From my perspective, I believe Open Enrollment for 2013 went well. There were very few glitches and relatively few questions. I would like to congratulate Chevron for its skillful planning and execution. All in all, it was a job well done!


Open Enrollment included approximately 57,000 eligible retirees. (Almost all of these are covered by Medicare.) Approximately 9 percent of the retiree group chose to change their Medical Plan elections from their 2012 elections. Finally, around 33 percent made changes via the Chevron website (up from 26 percent) while the number of phone calls to the Chevron Service Center decreased by 25 percent. Also, the number of emails and phone calls to members of CRA’s Benefits Committee were less than in past years. We all seem to be doing something right.


As we are aware, we saw our Chevron Medical Plan contributions increase for 2013. In the case of Medicare retirees, the increases were mainly caused by the rise in pharmaceutical costs. In the case of non-Medicare retirees, the increases were driven by the added cost of medical services and pharmaceutical products.

What Can We Do to Reduce Cost Increases?

A very effective way of reducing pharmaceutical costs is to use Generic Drugs and make purchases via Mail Order. Generic Drugs are less costly for both you and Plan.  A Generic Drug will cost you $5 for a 31-day supply while a Preferred Brand Name Drug will cost you $21 for a 31-day supply. Rather than purchasing a 31-day supply from a retailer, if you purchase a 90-day supply from Express Scripts your cost will be $10 for a Generic Drug and $42 for a Preferred Brand Name Drug.


Finally, in addition to your copayment you will be required to pay an annual deductible of $325 if you are a Medicare Retiree and you purchase Preferred or non-Preferred Brand Name Drugs. If you are a non-Medicare Retiree you will be required to pay an annual deductible of $325 if you purchase medications from a retailer. 

The Cost Savings Can Be Substantial

As you can quickly see, the cost savings by switching to Generic Drugs is great, especially if you are taking several medications. I strongly encourage anyone who is now taking a Brand Name Drug to discuss this with his or her physician whether a Generic Drug can be substituted.


Likewise, I also encourage anyone who is purchasing their medications from a retailer to ask their physician for a new prescription that will allow them to purchase their medication through Mail Order from Express Scripts. Finally, anyone taking any of the following Brand Name Drugs may be able to lower their costs through substitute Generic Drugs because those medications are losing their patent protections in 2013: TRICOR, ZOMIG, FOSAMAX PLUS D, NIASPAN, ACIPHEX AND CYMBALTA.   

Other Ways to Control Costs

Besides using Generic Drugs, there are other ways of controlling medical costs.  One way is to have annual physicals and periodic checkups, as necessary, to catch or control a medical condition before it becomes a major problem. If you already have a medical condition that requires close monitoring, like diabetes or a heart condition, please be sure to follow your doctor’s advice. That includes any recommendations pertaining to diet, exercise, etc.  For some conditions like diabetes, there is also assistance through Medicare and United Healthcare. Please be sure to check them out. Remember, ultimately, you can gain an improved lifestyle while also reducing your medical costs.  You are the eventual winner – better health and reduced costs. 


Before leaving the subject of Chevron Medical Plans, I want to remind everyone that, if you have a problem with a claim that you are unable to resolve, please feel free to contact me or another member of the Benefits Committee. I have found over the years that the root cause of most problems is miscommunication. Generally, by working with you, United Healthcare and Chevron most disputes can be resolved quickly and effortlessly. So please keep us in mind. 


Many Industry Increases Became Effective January 1

Now, turning to the public sector, in case anyone missed the announcement Social Security and Medicare are changing in 2013. With respect to Medicare, we will see the monthly premium for Part B coverage increase to $104.90 (from $99.90) for most individuals. Higher premiums may apply because of your level of income.


Also, a surcharge may apply to the Part D drug coverage provided through a Chevron Medical Plan also due to your level of income. Further, Medicare deductibles for Part A and Part B will increase to $1,184 (from $1,156) and $147 (from $140) respectively.   

Be Sure To Review Your Finances

In the New Year, you probably will be looking at your finances to make certain they are up to date – investments, income, expenses, etc. While you are reviewing your financial situation, it probably would be a good idea to also review your wills, estate plans, any similar documents and beneficiary and similar designations. Over the last several years, I’ve noticed more and more problems arising with beneficiary and similar designations under Chevron’s Life Insurance and Pension Plans.


During the last year there were a fair number of issues involving either the payment of or the continuation of benefits to surviving spouses. Needless to say, situations like this can be quite upsetting for the surviving spouse and heirs. To avoid similar problems be sure that your beneficiary and similar designations are current and your spouse and heirs are aware of your wishes. It’s important, too, that you retain a hard copy of your signed elections and that your survivors know where to find them.


Lastly, if you are receiving a monthly pension, make certain your (1) survivors have knowledge of what happens to your pension on your demise, (2) where to locate a copy of your signed elections and ideally (3) a copy of the letter that was given to you by Chevron or a legacy company that outlined your benefits when you retired. In a few cases, these documents were vital in establishing a spouse’s right to receive continued pension benefits. 


Shifting Thoughts to a Book About Hospital Care

Before closing this column, I want to share with you some interesting points that were made by Dr. Marty Makary in his recent book entitled “Unaccountable – What Hospitals Won’t Tell You and How Transparency Can Revolutionize Health Care.” He is a Surgeon at Johns Hopkins Hospital and an Associate Professor at the John Hopkins School of Public Health.


The aim of his book is to enlighten the public about what happens or does not happen that can result in adverse consequences for the patient. Shockingly, one study found that 1 in 4 hospital patients are harmed by medical errors. He goes on to mention that regularly hospital patients receive unnecessary or outdated care that can be dangerous.  He feels that to avoid these dangerous situations there should be transparency that allows patients to obtain information about specific hospitals and doctors. Through resources like Medicare, States’ Departments of Health and insurance carriers – like United Healthcare – it is possible to obtain some information about hospitals. Unfortunately, however, there is little available on doctors other than what may be passed along by word of mouth.


Author Advocates for Standardization of Medical Care, Accountability

Dr. Makary goes on in his book to mention he has increasingly witnessed patients who are fed up with a fragmented medical care system that is strewn with incentives that reward medical providers for the wrong things. In an ideal world, this is what he feels accountability should look like:


·         Bouncebacks
A consumer should be able to obtain the percentage of hospital readmissions within 90 days of discharge, by condition, adjusted for the severity of the disease. These figures should be available nationally, regionally and by hospital.


·         Complication Rates
A consumer should be able to obtain complication rates by condition that is broken down nationally, regionally and by hospital. The statistics should show the frequency of major complications resulting in problems related to these areas: respiratory, cardiovascular, bleeding, wounds,/infections. Gastrointestinal/malnutrition, kidney and neurologic. In addition, risk-adjusted mortality  statistics should be available.


·         Never Events
A consumer should have access to statistics that show events that should never happen. For example: leaving sponges or instruments in a patient, performing the wrong operation, performing the correct operation on the wrong side of a patient, death during elective surgery on a healthy patient, etc. These statistics also should be available nationally, regionally and by hospital. 



·         Safety-Cure Scores

Make available statistics showing the percentage of hospital medical care providers (doctors, nurses, etc.) that would have an operation in the hospital where they work; feel comfortable speaking up when they have a safety concern; and feel that the medical team promotes doing what’s right for the patient.


·         Hospital Volumes
Hospitals would make available data showing the number of patients treated annually by medical condition or by surgical procedure. In the case of surgical procedures, they should show the percentage performed using minimally invasive surgery versus traditional open surgery. 


·         Transparent Records, Open Notes and Video Recording
“Consumers should be able to find out which hospitals participate in programs that streamline access to written and video records.” 


I encourage anyone who would like to learn more to pick up a copy of Dr. Makary’s book.


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