MOBILE – Michael Burdine said he still has injuries to his neck, shoulder and back after being run over twice by teenagers in 1985, while he was working as an officer for the Mobile Police Department.
The incident, he said, required two shoulder surgeries and a neck surgery and he still feels the effects 30 years later, as a 62-year-old. Burdine said he needs the health insurance the city offers and doesn’t want to think about a change in coverage when he turns 65.
“I’m not interested in any other plan than what the city currently offers,” Burdine said. “They need to keep the promise they made to the people who helped build this city.”
The Mobile City Council held over for two weeks a decision on a new health insurance plan for Medicare-eligible retirees through Humana, which Executive Director of Finance Paul Wesch said would save the city $1.4 million and offer coverage that’s “as neutral as possible.”
Councilors made the decision to hold over the budget item until a special meeting called for Wednesday, Sept. 2 at 10:30 a.m. to allow two large unions — one representing firefighters and the other, public works department employees — to meet before a final decision is made.
The administration has until Thursday, Aug. 20, to present the 2016 budget to the Council, but Mayor Sandy Stimpson told councilors the holdover won’t affect the budget he presents.
“The budget will include the the change we proposed,” Stimpson told councilors during a pre-conference meeting Tuesday.
Councilman John Williams, who recommended the holdover, told councilors he believed the plan was a “win-win” for retirees and the city. He also suggested delaying a finance committee meeting on the budget until after a decision is made. Councilors decided instead to hold the committee meeting as scheduled at 2 p.m. Tuesday, Aug. 25.
The issue of retirees’ health insurance became politically charged during last year’s budget negotiations. The council had to override Stimpson’s veto to allow $2.5 million to be transferred from capital to keep Medicare-eligible retirees on the city’s health insurance plan.
The administration has now come to the council with a Medicare Advantage Plan from Humana to cover the 775 Medicare-eligible retirees.
Wesch said many of the benefits are equivalent to or better than retirees’ current plan. For instance, under Humana there is no calendar-year deductible, whereas with the current plan it’s $250.
There are no changes in copays for physicians, specialists and outpatient surgery under the Humana plan and a reduction in the copay associated with emergency room visits. While the current plan charges a $125 copay for ER visits, Humana’s charges just $50.
Wesch also brought up a misconception about the current insurance. He said there’s been a lot of talk about a $1,250 cap on everything involved in the city’s plan, but that’s not accurate. Wesch said the cap covers mostly prescriptions and doesn’t include copays and deductibles for doctor or hospital visits. In contrast, he said, Humana will offer Medicare-eligible retirees a $3,000 cap for medical expenses and a $1,500 cap for drugs.
“That’s something we didn’t have before,” Wesch said.
Also with regard to prescriptions, the Humana plan will pay 100 percent of the cost of generic drugs. For brand-name drugs, members will be charged 20 percent of the copay at the point of sale. With the current plan, members are reimbursed for the point-of-sale cost, which they must pay.
The Humana plan also provides 100 days of in-home skilled nursing care without a copay, whereas the current plan requires a $250 copay for 60 days.
Under the current plan, retirees are charged 20 percent, or the deductible, for an ambulance ride, Wesch said. Under the Humana plan, there is no charge for an ambulance ride.
There are two drawbacks to the Humana plan, Wesch said. Under the current plan, retirees receive a free eye exam and any medical expenses for eyes are covered, outside of glasses. Under the Humana plan, eye-related medical expenses are covered, like in the current plan, but eye exams are not free.
The other drawback is there’s no dental coverage under Humana, Wesch said. The current plan pays for cleanings and “once-a-year” X-rays, he said. Both plans cover any medical-related dental work.
Out of the four insurance plan proposals the city received, none carried dental coverage, Wesch said.
Among the benefits to the city, he said, the Humana plan will save $1.4 million a year in the short term. It also “solves a problem that has been coming for a long time.”
Wesch said Mobile looked at peer cities. In two of those, Huntsville and Tuscaloosa, there’s no coverage for retirees 65 or older. In Birmingham and Montgomery, Wesch said the coverage came at a high cost to the retirees. For instance, Wesch said, Birmingham’s coverage ranges in cost from $220 to $1,078 a month. In Montgomery, coverage ranges from $46 to $905 a month, he said.
“If you look at those four cities, those are terrible situations,” Wesch said. “This [plan] is wonderful in comparison.”
Burdine, who retired from the MPD in 2005, said he hadn’t seen the latest proposal from the administration, but said it wouldn’t matter because he only wants what he was promised.
Before becoming an MPD officer, Burdine drove a truck. He said he gave up a much better salary driving a truck partly because of the benefits he was promised by the city.
Burdine, who now works as a Mobile County Sheriff’s Deputy, said he also doesn’t trust that the administration will continue to fund the plan in the coming years. He said his biggest fear is that they use this to split the Medicare-eligible retirees into a separate category of insurance, which would allow them to stop funding the plan in future budget years without affecting others who are currently insured.
Stimpson said he only wanted to try to save taxpayers $1.4 million.
“It’s not our intent for this to be a bait and switch,” he said.
Councilman Fred Richardson asked about the reason for the one-year contract during the pre-conference meeting. Wesch said Humana is only allowed to enter into contracts for insurance on a one-year basis.
“They can’t enter into a contract longer than that,” he said.