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Insurance coverage chief: Pulling 80 dependents' protection

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Despite objections from some state legislators, the administrator of the health insurance plans covering public school and state employees said Tuesday that he intends to go ahead with the removal of 80 adult dependents of employees or retirees from the plans on Jan. 1.

All but six of the people to be removed from the plans next month are covered by Medicare, Medicaid or both, said Chris Howlett, director of the Department of Transformation and Shared Services’ Employee Benefits Division.

In the past, the plans extended coverage for dependents past the normal cutoff age of 26 if a dependent is medically certified as “totally disabled due to mental or physical capacity.” That’s in line with Arkansas laws that require other types of health insurance plans to offer such extended coverage.

The cost of covering all 80 individuals is about $1 million a year, equal to about 1% of the premiums paid by state and public school employees, Howlett said.

“We could see rates going up on the whole population to subsidize, and I use that word loosely, a population that could be afforded other care,” Howlett told the House and Senate committees on public health, welfare and labor during a joint meeting Monday.

The House committee chairman, Rep. Jack Ladyman, R-Jonesboro, said Tuesday that he hopes Howlett will reconsider.

He said he’s heard from two constituents with retiree coverage who were “very upset” to learn their adult children will be taken off their plans.

Ladyman said he understands their concerns: He has coverage from his former employer that includes his disabled 48-year-old son.

He rarely uses the coverage because his son also is covered by Medicare and Medicaid, he said, adding that he pays for the additional private insurance in case it’s needed for something those programs don’t cover.

“Morally, it’s not the right thing to do for our Arkansans who have worked their whole life for the state,” he said of the plan to remove adult dependents with disabilities from the employee and teacher insurance plans.

Judy Wilson, an 80-year-old widow from Jonesboro and retired clerical worker with the state Department of Human Services, said the plan for state retirees fills in gaps, such as co-payments and deductibles, in her daughter’s Medicare coverage.

She’s looked into getting other private supplemental coverage for her daughter, who is 58 and has Down syndrome, but was told she wasn’t eligible.

“I just think it isn’t fair after all these years of us giving our time and talents to the state, they turn around and do this,” Wilson said.

The 2010 Patient Protection and Affordable Care Act requires plans that cover dependents to offer the coverage until the dependents reach age 26.

Arkansas law requires individual and group plans regulated by the state Department of Insurance to extend coverage past that age for adult, unmarried dependents who became disabled before age 19 and whose disabilities render them “incapable of sustaining employment.”

But the laws don’t apply to the state and public school employee plans.

Howlett said Tuesday that he had agreed to meet next week with Ladyman and Rep. Lee Johnson, R-Greenwood, to discuss their concerns further.

“As far as a decision, presently I’m still firm in the decision” to take the dependents off the plans, he said.

The issue arose during an audit of spouses and dependents covered under the plans, he said.

Of the 80 dependents with coverage based on a disability, 23 have Medicaid coverage, 26 are on Medicare and another 25 have coverage under both programs.

The remaining six people had been allowed to have coverage under the disabled dependent category even though there was no indication in state records that they are disabled, Howlett said.

He said his division sent letters to and called all of the affected dependents and offered to help them find other coverage.

The plans cover about 158,000 people, including employees and retirees and their spouses and dependents.

When an enrollee also has Medicaid, that program generally covers only expenses that aren’t covered by the employee plan. For enrollees who are on Medicare, that program pays first.

The State and Public School Life and Health Insurance Board makes decisions about the rates and benefits for the school and state employee plans, but wasn’t involved in the decision to eliminate eligibility for older dependents with disabilities.

Howlett said state officials determined that the change didn’t require the board’s approval.

Arkansas Code 21-5-404 gives the board the authority to “summarize plan document approval, including without limitation lifetime limitations, copayments, deductibles, and eligibility rules.”

Board chairman Carla Haugen and vice chairman Renee Mallory didn’t return calls seeking comment Tuesday.

Board member Terry Fiddler said he wasn’t aware of the change and didn’t think the board had authority over eligibility rules.

Ladyman said he will “look at what options I have to stop it” if Howlett doesn’t restore eligibility for the dependents.

“I think it’s unfortunate that we would take away insurance from a vulnerable group like this without their input,” he said. “I don’t think we as a state ought to be doing that.”

A Section on 12/11/2019

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