Employers can reduce coverage for Medicare-eligible retirees: Iowa SC
Iowa Supreme Court
DES MOINES -- An Iowa employer is not obliged to continue as primary health care provider for a retired employee if that employee can be covered by Medicare, the Iowa Supreme Court ruled today.
The decision affirms a wider trend of health insurers reducing costs incurred by older policyholders by either restricting coverage or raising co-payments, encouraging them to enroll in government plans instead.
In Gordon Harrington vs. University of Northern Iowa (# 107 / 04-1673), the Supreme Court affirmed a District Court ruling that a retiree's claim for primary coverage from UNI while eligible for coverage under Medicare Part B, be rejected. Part B covers doctors' visits, generally with a co-pay by the insured.
The Supreme Court wrote that the trial court correctly interpreted that under the UNI's health-care plan, that UNI would provide "only secondary coverage to a retiree who is eligible for Medicare Part B coverage." The court also affirmed that the retiree did not actually have to be enrolled in Part B for the clause to be effective.
Similar legal struggles are playing out in other states. Pennsylvania residents covered by Independence Blue Cross have filed a class action suit against the insurer claiming its $1.2 billion surplus is too high at a time when the insurer is raising premiums and co-pays and cutting benefits.
And a recent case in Virginia revealed that the U.S. military's managed health-care program TRICARE for Life had "involuntarily" enrolled thousands of military retirees across the country in Medicare's new prescription-drug coverage (Part D). Retirees complain that Part D is more expensive and cumbersome than the old TRICARE plan.