State Employees' Union Pushes Back on Scott's Insurance Pitch 

Gov. Phil Scott’s plan to save money by shifting retired state workers to a new private Medicare insurance plan has public employee unions livid and Democratic lawmakers vowing to block the effort.

The administration says that moving more than 6,000 retirees to a new Medicare Advantage plan could save the state $9 million, reduce premiums for retirees and lower the system’s long-term liabilities.

“It seems like a win for everyone,” Scott said on Tuesday at his weekly press conference.

He noted that retired teachers and state college employees have shifted to the private Medicare insurance programs. “I haven’t heard any complaints from them,” the governor said.

But the Vermont State Employees' Association has been resisting the idea since the Scott administration first proposed it in the fall. Union leaders say they have no intent to back down.

The state is effectively proposing to privatize Medicare and leave retirees at the mercy of the private insurance companies who will manage the plans and will have a motive to deny needed care, said Steve Howard, the union’s executive director.

“The governor has more confidence in the insurance industry than our retirees do,” Howard told Seven Days on Tuesday.

Medicare Advantage plans are offered by private health insurers who must follow coverage rules set by Medicare. Some companies offering the plans have been accused of inflating how sick people are to increase reimbursements and deny retirees necessary medical care, Howard said.

If that happens now under the current Medicare coverage, retirees or unions can get the issues sorted out locally by working through the state Department of Human Resources. Under a private insurance plan, however, retirees would have to deal with out-of-state insurers.
“It turns out you can save money when you deny senior citizens health care,” Howard said. “That’s how these companies save money.”

Administration officials say the Medicare Advantage program would mirror existing benefits, lower some copays for services such as chiropractic care and would be customized to meet retirees' needs. The program would be all-inclusive, with medical and pharmaceutical coverage handled using a single card.

The reason teachers and college system retirees haven’t complained may be because they didn’t have much of a choice, Howard said. State retirees, however, are legally required by statute to receive the same health benefits as working employees, which means the legislature would need to approve the change, he argued.

That seems unlikely. Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) and House Speaker Jill Krowinski (D-Burlington) issued a joint statement last week opposing the change.

“We share the concerns of many retired state employees about the legality and the financial and health implications for our state’s retired public servants,” they wrote. “State retirees have dedicated years of service to the State of Vermont and they deserve the assurance that the healthcare benefits they were promised will be protected.”

The main reason the state will save money is because of federal subsidies, which could go away any time, Howard said.

"Do you trust Marjorie Taylor Greene to keep those subsidies in place?" Howard said, ticking off names of far-right Republican members of Congress. "Do you think George Santos should be in charge of your health care? Phil Scott does."

Howard said the administration wanted to impose the change on January 1 of this year but backed off after hearing from angry retirees and realizing they'd "stepped on something."

Union officials were expecting to hear the governor try to sell the switch in his budget address but took solace from the fact that he didn't mention it.

"If it's such a great plan, why wasn't it in the speech?" Howard said.