Eight years ago, I served as local counsel in a class-action lawsuit on behalf of Bowater-era retirees of the Katahdin region paper mills who had lost their health insurance benefits when Inexcon filed for bankruptcy. Those benefits had been promised by Bowater, Inexcon’s predecessor, as a condition of early retirement for approximately 650 retirees and their spouses and earned by the retirees through years of paycheck deductions.
Bowater eventually prevailed in the lawsuit by successfully claiming that it had reserved the right to break the promise, thereby eliminating health insurance for the class. This victory encouraged its predecessor, Georgia-Pacific, to follow suit and eliminate health insurance for its salaried retirees and spouses in the Katahdin region (an even older group, including 94-year-old widows).
As a result of the loss of health insurance and prescription drug coverage for both groups of retirees, many of them resorted to the state’s Medicare buy-in benefit, which pays for Medicare Part B premiums as well as prescription drug premiums, co-pays and deductibles for the elderly and low income. I heard heart-wrenching stories from retirees, including younger disabled retirees, many of whom were too proud to seek state assistance yet too desperate to ignore it.
These retirees often fall through the cracks: They make just enough in Social Security income to not qualify for full MaineCare but too little to cover their out-of-pocket Medicare premiums and prescription costs. This Medicare buy-in currently covers 40,000 Mainers.
Now Gov. Paul LePage proposes to reduce the income eligibility level so that a large majority of those Maine seniors and disabled residents, including a large number of Katahdin-area retirees, no longer will qualify for the buy-in. The buy-in now is paid for from the Fund for a Healthy Maine, which is Maine’s share of the tobacco settlement.
The governor proposes to use this money to instead pay the bills that the state owes to hospitals and to offset future increases in health care costs to the hospitals (all the while fighting against federal health care reform).
As a private citizen and not in any official capacity, I contacted my own legislators as well as those from the Katahdin region to impress upon them the dire financial hardship that this proposal would cause. One call to a state senator left me in awe.
I explained my familiarity with his Katahdin-area constituents and urged him to consider the hardship that this change would cause them and all of Maine’s elderly and disabled. He responded that he knew of people who “had it worse” and indicated his intention to vote in favor of the proposal. He reasoned “it’s not much per prescription — only $3 or $4 each” but, incredibly, in the next breath, he conceded, “I have no idea how much it would add up to — could you get me the numbers?”
It is unconscionable that a representative of such a large number of elderly constituents would plan to vote for such a drastic reduction in their financial assistance without determining its financial impact.
After the call, I researched the Center for Medicare and Medicaid Services, and here are the numbers.
I found that the average value per senior for the buy-in is $4,000 per year for the combination of Medicare Part B premiums, Medicare Part D prescription premiums, deductibles and co-pays, which of course is higher for those with a greater number or more expensive prescriptions.
One example cited by the Maine Agencies on Aging: A typical retired couple in the income category that now qualifies for the buy-in, with a combined annual Social Security income of $21,800, would lose $8,000 per couple per year, leaving them $13,800 to live on per year. If the proposal were passed, these seniors would be forced to choose among food, fuel and prescriptions. If they decided to go without their prescriptions, the result would be a sicker elderly population, many of whom would end up in hospitals and nursing homes.
When the governor talks about shared sacrifice, the sacrifice needs to be proportional. The proposals in his budget that disproportionately harm Maine’s most vulnerable need to be revised to share the pain proportionally. With a straight face, he cannot convince us that these are simply “tough choices” when other proposals are in place to benefit Maine’s wealthiest residents.
The impact to the Katahdin region is a stark example of the disproportionate impact of his proposed budget on Mainers most in need, especially in this economy.
Diane Khiel of Orono is a lawyer.