Over 30,000 would be affected by Abercrombie proposal to cut Medicare Part B reimbursements

HONOLULU—During Gov. Neil Abercrombie’s State of the State Address last month, the governor proposed a number of ways to solve Hawaii’s most dire social crises and balance the State budget at the same time. Abercrombie’s plan involves tax increases, introducing new ways to generate revenue, such as raising timeshare fees, and focusing on government priorities by cutting what he says the State can no longer afford.

One of those cuts would be State-funded reimbursement for federal Medicare Part B benefits for Hawaii government employees. The State workers labor union, Hawaii Government Employees Association (HGEA), is keeping a close eye on this particular proposal by the governor. HGEA says a cut on reimbursements will have a wide reaching impact on a large portion of Hawaii’s population, particularly seniors.

There are over 70,000 State employees, according to The State of Hawaii Data Book 2009. Of Hawaii’s total State employees, 30,484 are receiving reimbursement for Medicare Part B. Of that amount, 22,937 are retirees and 7,547 are spouses of retirees.

In his State of the State Address, Abercrombie said: “I am proposing that we end the current practice of State-funded reimbursement for federal Medicare Part B benefits for Hawaii government employees. I am personally one of those recipients of this benefit from my previous service in State government. But it is a bonus paid for by taxpayers that can no longer be justified in light of our current fiscal and social crisis. I did not earn it and cannot justify asking taxpayers, public and private, to pay for it.”

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Medicare is health insurance for: people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant).

Medicare Part B covers medically-necessary services like doctors’ services, outpatient care, home health services, and other medical services. Part B also covers some preventive services.

Specifically, medically-necessary services are services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice. Preventive services refer to health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.

According to the Medicare Part B application, a person is eligible for Medicare Part B if they collect Social Security or Railroad retirement benefits, receive disability benefits from Social Security, or have Lou Gehrig’s disease.

HGEA spokesperson Jodi Endo Chai said the union has not yet met with the Abercrombie administration.

“While we see the need to determine ways to address the State budget shortfall, we are deeply concerned with the proposal to eliminate the Medicare Part B reimbursement,” Chai told The Hawaii Independent. “This would impact the most vulnerable in our community—the elderly, whose pensions don’t keep up with the cost of living. Without this reimbursement, these retirees might not even be able to make ends meet. We will be monitoring the Legislature to see what they will do.”