Laura Ecklar: Clarification about the Nov. 7 STRS/HCA meeting in Cincinnati

From: "Ecklar, Laura" >>To: "molly janczyk" >>CC: "Asbury, Damon" >>Subject: RE: DAMON:report on second Cincinnati meeting>>Date: Wed, 9 Nov 2005 11:11:33 -0500>>>>Unfortunately, the meeting comments shared in the e-mail do not reflect>>the entire conversation. The question Ms. Scott posed was, if a dedicated>>revenue stream was not found for the health care program, would just the>>premium subsidy end or would the entire health care program end? Our>>response was that, without premium subsides, the premiums would eventually>>exceed many plans available in the marketplace and the vast majority of>>our members would move to those. Consequently, the program will>>eventually end. The proposal we are sharing with active members is>>designed to keep a premium subsidy for STRS Ohio benefit recipients. I>>hope this answers your question. Thank you.>>************************** Read On *******************
Sent: Wednesday, November 09, 2005 1:19 PMSubject: Re: Clarification about the Nov. 7 STRS/HCA Meeting in Cincinnati> Thank you, Marvin. This helps. I didn't understand this item in Scott's> ques.> We always want to be factual in our info and I needed clarification.> Appreciate it.>>>>From: Marvincb@aol.com>>To: mollyjanczyk@hotmail.com>>Subject: Re: Clarification about the Nov. 7 STRS/HCA Meeting in Cincinnati>>Date: Wed, 9 Nov 2005 13:12:17 EST>>>>Debbie Scott's question was about what would happen in 2018 if we do not>>get>>an increase in funding. Slide 26 had made it clear the plan is solvent>>until>>2018. Slide 29 stated that "Without changes, the health care fund is>>eventually depleted." The presentation had already made clear that cost>>cutting>>measures will not be enough to save the STRS Health Care Plan.>>>>In answer to Debbie Scott's question about whether just the subsidy would>>be>>discontinued or whether the plan itself would be, Laura Ecklar and her>>cohort, Larry Lewellen of OSU, said that as the premiums increased, the>>healthy>>retirees could and no doubt would go out in the open market and get a>>better>>premium. Because of the open enrollment features of the STRS healthcare>>plan,>>in 2018 only those who were in poor health would ever opt in as their>>premiums rose on other plans they had acquired outside STRS. Those two>>trends>>would leave only those with severe health care problems in the plan. This>>adverse>>selection would then make the plan no longer viable-the costs would go>>through the roof. It wouldn't just be that the subsidy would go away at>>that time.>> (My understanding is that the whole idea of a pooled risk of healthy>> and>>unhealthy would have been destroyed. As a result, no one would be able>>to>>afford the premiums that would have to be charged to maintain such a>>plan.)>>>>That is a worst case scenario, and their answer assumes that no changes>>would be made in the open enrollment feature. It wasn't intended to>>scare>>people, but it is a likely scenario if something is not done. The answer>>certainly>>enforced the idea of the seriousness of the situation for the active>>teachers>>and the retirees.>>>>Marvin
ORC 3307.15 - not just a wish, IT'S THE LAW!