OGB Medicare Advantage study voluntarily deferred after committee review of retiree savings and revenue impacts

Chairman Bakkelon voluntarily deferred House Concurrent Resolution 7 after committee members reviewed Office of Group Benefits analysis of a potential shift of retiree coverage to Medicare Advantage.

Bakkelon summarized figures provided by OGB staff: retiree premiums currently total roughly $306 million and could drop to about $161 million under a Medicare Advantage option, a gross premium reduction of about $145 million. But OGB staff said federal subsidies, drug rebates and other offsets — roughly $146 million in the analysis — would also be affected, leaving a net reduction in plan revenue and a projected net loss of about $37 million a year if the state fully implemented a Medicare Advantage conversion, though OGB staff and the chairman described alternate implementation approaches to mitigate a large revenue hit.

Heath Williams of the Office of Group Benefits said OGB operates like a business: federal subsidies and Part D rebates substantially offset retiree costs under the current arrangement and the plan is structured to provide comprehensive coverage. Williams said OGB is exploring a Medicare Advantage plan with a PPO-style nationwide wrap to allow broader coverage and lower premiums for retirees while managing state plan revenue impacts through staged implementation.

Committee members asked for further details on fund balance, the number of retirees covered (OGB staff said retirees number in the tens of thousands, with plan membership figures in the committee record), and how any OGB revenue change would interact with agency appropriations that currently fund employer-side premiums. Representative Bakkelon asked that the resolution be deferred because committee members had received the analysis that morning and he wanted more time for review; the committee permitted the voluntary deferral.