Vt. officials float plan to privatize state retirees’ health care

September 23, 2022

MONTPELIER, Vt. (WCAX) – Retired state employees could be getting a new private health care plan but the union representing them is sounding the alarm.

State employee retirees right now have Medicare through the federal government and supplemental health care plans through the Vermont State Employees Union. Those supplemental plans are similar to what current state employees have. But a new plan from the Scott administration would switch some 6,000 retired employees into a private Medicare Advantage plan.

“It provides extra benefits that Medicare doesn’t cover. It provides a lot of extras that you wouldn’t get with Medicare,” said Vt. Human Resources Commissioner Beth Fastiggi.

She says those benefits include savings on chiropractic and acupuncture services, vision benefits, and gym memberships. The switch is projected to save the state $9 million annually. We asked state officials where the savings come from but they couldn’t provide details and referred us to the numerous private carriers.

But the Vermont State Employees’ Association is skeptical of privatizing health care for its members. “We strongly oppose any effort to move retirees to a system where health care executives have a bigger say than bargaining teams,” said VSEA’s Steve Howard.

Vermont will go through the competitive bidding process to select a health insurance company to partner with and they still need to come up with a specific plan for retirees. Meanwhile, the union plans to challenge the proposal in court. Howards says state law requires retirees’ health care plans to go through the collective bargaining process. “You can’t ignore the law and the law is pretty plain on this issue. Retired state employees are in the same plan as active state employees,” he said.

Fastiggi says the intent of the law is to ensure retirees receive benefits equivalent to active employees.

Thousands of retired teachers quietly switched over to a similar plan back in January called Blue Advantage, a Blue Cross Blue Shield product.

In the months ahead, the state will be making its pitch to retirees and their families on what could be changing and what these plans mean for them. “I don’t want anyone to be concerned that they’re not going to know what’s happening. We will be sure to communicate with them to be sure that whatever transition we make will be smooth and work for everybody.”

The University of Vermont and Vermont State University retirees have also moved to Medicare Advantage plans.

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