Ramsey County, St. Paul schools considering options for retirees caught in Medicare Advantage disruption

Ramsey County and St. Paul Public Schools might let retirees opt out of their current health plans, and instead obtain Medicare Supplement policies at a higher price, to avoid disruption next year when HealthPartners doctors say they’ll go out-of-network for UnitedHealthcare Medicare Advantage members.

County commissioners and the city school board are scheduled to consider the proposals during separate meetings Tuesday.

About 2,300 school district retirees and 1,100 who have retired from Ramsey County are active patients at HealthPartners, which announced in July it would leave the UnitedHealthcare Medicare Advantage network in 2025.

Many of these retirees have health benefits subsidized by their former employers, but can’t use the subsidies if they leave for new coverage with access to HealthPartners. The county and school board proposals would allow them to maintain access through a new subsidized coverage option.

“Given the high utilization of HealthPartners providers, strong likelihood of significant change in plan provider network and the impact on retirees of leaving the county program, human resources requested UnitedHealthcare ... provide retirees with an additional plan choice that includes coverage for HealthPartners providers,” the county says in background materials for the commissioners.

Medicare is a government health insurance program for U.S. seniors that covers hospitalization and doctor visits. Since Medicare doesn’t cover all costs, a product called a Medicare Supplement can be purchased privately to expand the coverage, often paired with a separate Medicare policy for prescription drug coverage.

A popular alternative is the Medicare Advantage plan, which is sold by an insurer paid by Medicare to provide for members’ care, typically including coverage for medications. Advantage plans often have low upfront premiums compared with the cost of a Medicare Supplement plus a Medicare drug plan; but they generally have fewer providers in their networks.

The contract dispute between HealthPartners and UnitedHealthcare is the biggest of five instances in recent months where health care providers in Minnesota have given notice that they intend to drop Medicare Advantage networks next year.

In all cases, it’s still possible that health care providers and health insurers will come to terms on contracts that preserve in-network access next year. Even so, seniors facing potential disruptions because of the disputes are beginning to feel a time crunch, since open enrollment for Medicare health plans begins Oct. 15 and ends Dec. 7.

In three of the five recent disputes, the consequence is that patients will pay more out of pocket to visit out-of-network health care providers. But with the impasse between HealthPartners and UnitedHealthcare, the stakes seem greater because HealthPartners says it won’t let patients on UnitedHealthcare Medicare Advantage plans schedule appointments at the health system next year.

Retirees from Ramsey County and St. Paul Public Schools have been pushing for some kind of remedy, since many have longstanding relationships with HealthPartners. Without a fix they may have to change doctors, and they have voiced frustration over the mixed messages to patients from both sides in the dispute.

“If UnitedHealthcare and HealthPartners reach a network agreement by December 31, 2024, Ramsey County can administer a special open enrollment in January of 2025 allowing retirees to move back to a less expensive UnitedHealthcare Medicare Advantage plan.” according to background materials published by the county.

At St. Paul Public Schools, the recommendation under consideration Tuesday says the new insurance option would be developed “in the event that HealthPartners and UnitedHealthcare [do] not reach an agreement by close of business on October 15, 2024.”

The Medicare Supplement policies being considered by Ramsey County and St. Paul Public Schools include a Medicare Part D drug policy that would be more expensive, with additional costs split between retirees and their former employers.

Extra costs for individual retirees would vary.

A slide presentation for the school board indicates the new plan could cost the district up to $3.5 million, depending on how many retirees select the one-time option.

Offering the option could cost Ramsey County up to $1.2 million.

St. Paul Public Schools says retirees would have guaranteed issue rights to the new Medicare Supplement option, meaning they could avoid filling out a health care questionnaire that can block seniors in some circumstances from enrolling. Ramsey County did not respond to a question about guaranteed issue rights.

The school district and the county say that, beyond potentially offering a Medicare Supplement option for retirees in 2025, they’ll soon be requesting proposals from companies for a new retiree health insurance option in subsequent years.

About 1,000 retirees from the city of St. Paul also are facing a potential disruption next year. A city official said Monday that offering a Medicare Supplement option “is a consideration for us, as well.”