The Limits of Medicare | Medicare is the health insurance program administered by the U.S. gov-ernment for people age 65 or older, or under age 65 with certain disabilities or diseases. Although Medicare pays for many specific health care services and related expenses, the system does not provide coverage for all health care costs. Fortunately, many health care expenses not paid by Medicare may be covered by supplemental insurance.

ACERA’s Supplemental Insurance Coverage | Medicare-eligible ACERA members may obtain supplemental insurance through ACERA’s Kaiser Permanente or UnitedHealthcare plans. While Kai-ser’s plan runs fairly smoothly, member feedback has shown that UnitedHealthcare plans are high in cost and have customer service issues. Keeping costs low is important due to funding limitations: the reserve that funds the medical benefits has, for the first time, fallen below a 15-year life expectancy.

Researching Alternatives | In working to address the issues of carrier customer service and cost, ACERA staff has conducted extensive research on the concept of Medicare Exchanges and the prudence of replacing the current UnitedHealthcare Medicare supplemental insurance plans. A Medicare ex-change is a company that operates as a marketplace wherein dozens of health insurance carriers offer hundreds of plans to meet a retiree’s personal needs. The exchanges offer quality customer service by pro-viding unbiased information and advice to optimize the connection between customer and insurer. The volume of insurers competing for customers in one marketplace generates a significant cost savings.

Finding an Exchange | As a result of the prelimi-nary research, ACERA published a Request for Pro-posals (RFP). In March of this year, multiple vendors submitted detailed proposals and were interviewed at length. ACERA staff presented the results of the RFP—along

with analyses, findings and recommendations—to the Retirees Committee meetings in May and June and recommended Extend Health, Inc. as the pre-ferred vendor. The full Board adopted the staff recommendation on June 21. ACERA will continue to offer Kaiser’s popular Senior Advantage plan without change.

Comparing Costs | Extend Health is the largest Medicare exchange in the country and has worked with over 300,000 retirees. Importantly, Extend Health is able to provide the exact same supple-mental plan now being offered to ACERA members (UHC’s Senior Supplement plan) with at least 20 to 30% in cost savings. This would equate to an annual savings for ACERA of $1 – $2 million and help extend the lifespan of the reserve account. Of course, retir-ees or Medicare-eligible dependents may select a dif-ferent plan from over 1,000 offerings and more than 75 carriers, including many more options for mem-bers living outside the service area of current plans.

A Process Simplified | Enrollment in Medicare exchange plans is handled by phone: members call a licensed Benefit Advisor to review personal needs and budget before choosing the best plan. Members work with the same Advisor to manage their health insurance needs and annual open enrollment. As always, ACERA’s Benefits Facilitator will remain avail-able to assist.

More information will be sent to retirees this sum-mer—including workshop schedules and informa-tion packets—to educate retirees on this exciting new delivery of health benefits.

Medicare Exchange: Lower costs & increased plan options

For an enjoyable cartoon overview of the Medicare Exchange concept, please visit www.youtube.com and

search “Medicare Exchange.”