State Ends Drug Coverage for Retirees

Thousands of retired state employees will soon receive notice that their prescription drug coverage through the state is ending.

State retirees will be directed to sign up for the new Medicare Drug benefit that starts January 1st. Dick Chapman directs Tennessee’s insurance administration division. He says notices will be sent out to 23-thousand retired state employees by the end of this month.

“In general, it is a better benefit at a lower cost to the retiree in part because of the benefit structure. I mean, retirees will tell you it’s not perfect, but when you look at the up side, you know, people with lots of drug expenses, it is an extraordinarily good benefit.”

Even with the elimination of a prescription drug benefit, Chapman says the state health insurance costs will not decrease. That’s because the state pays a fixed amount toward a retiree’s health care costs. The amount varies from twenty to forty dollars per month, depending on how long an employee worked for the state.

All employers in Tennessee are required to notify their retirees how Medicare’s drug benefit compares to what currently have.