OTTUMWA — The Ottumwa City Council met in a special session Friday to vote on changing the Post-65 retiree insurance package for its former city workers.
The city voted 4-0, with council member Skip Stevens abstaining, to change the package from Wellmark to Humana Medicare Advantage, effectively saving both retirees and the city money, while keeping almost all of the same benefits.
The city used the Johnston-based consulting firm of Mark J. Becker & Associates to come up with a solution for retirees, who face the stiffest tax rate on benefits out of all 940 communities in the state.
Under the Humana package, of note:
• The total expenses would be $209 per month per retiree, with retirees paying $83.60 a month and the city filling in the rest. Those numbers are down from Wellmark's fees ($530 and $102).
Overall, the city would save $476,100 annually by switching.
Coverage begins March 1 of next year and ends Dec. 31, and the plan can be reviewed annually.
Under the Humana plan, a $185 deductible is waived for the year, even if some have paid the deductible through Wellmark by March 1. They won't be paying more than one deductible next year. However, it will go back to $185 in 2022.
When the council met in regular session Tuesday to discuss the potential change, Stevens wondered if retirees could choose their providers and doctors under the Humana plan, but on Friday, Mayor Tom Lazio said there wasn't anything holding back physicians from moving in and out of the coverage.
City finance director Kala Mulder affirmed Lazio's statement.
"That is true. Even if we stayed with Wellmark, we can't guarantee the doctor will stay with that network, or the provider the doctor is working for will stay with that network," she said.
Council member Holly Berg pointed out that out-of-network services were still covered 100%, even if the doctor is out-of-network.
"Even if that doctor is not in-network, they will still be able to see that doctor out-of-network," Mulder said.
Nick Brown, an MJB&A representative, further clarified Mulder's answer.
"As long as that provider is willing to accept Medicare and is willing to submit the bill to Humana," he said, "whether they're in-network or out-of-network, the benefits are still the same. The key is just making sure they take Medicare and they're willing to submit the bill to Humana."
The city has added links on its website, www.ottumwa.us. The links include the breakdown of the plan, the drug formulary and a search for physicians. Mulder also said letters would be sent to retirees about the new plan, or they can call city hall if they have question.
The plan affects retirees who are 65 and older, and also were hired by the city before February of 1993. Though MJB&A is currently working on options for current employees, retirees were the first group of workers the city wanted to target.
The plan combines both insurance and drug plans, and there are few changes in the drug plans. Seventeen drugs used by retirees from April 1 to Sept. 30 of this year will see a positive change (i.e., reduced cost), and seven will see a negative change (i.e., increased cost, or a different tier of the plan).
"So our goal is to be sure our retirees get basically the same benefits as possible. There's no guarantee of 100%, but as much as possible both in terms of medical care and drug formulary," Lazio said. "With all insurance it's subject to annual review, and Becker will help us do that."
"Correct," Mulder said.