Retirees of Stanford is a natural constituency, a newsletter and support group. Let me know if you are interested. I'd like to hear from you. This web page is a blog of sorts. That's how it turned out.

There are a great many forces at work, both nationally and locally at Stanford, to adapt health care by involving patients as co-partners in the choices which are contributive to cost and outcome. I see need for enhanced transparency and candor among all parties to that end. Is it wise to deny patient access to their Doctors' post-appointment notes? Clearly a complex example that can be debated.

Stanford Benefits offers a nice summary of documents to be familiar with before you set a retirement date. If you've been laid off, and may be eligible for Stanford retirement, use the same list, but make an early appointment and trip to the EDD Unemployment office. Take an observant friend with you when you are talking to Stanford Benefits.

Find a competent health insurance advisor for 2010? I've checked on the current situation for Stanford people.

People ages 50 to 64 are most likely to benefit from the new federal health law because they have the highest rates of long-term unemployment among working-age adults and are more likely to have health problems that would make it tough for them to buy individual coverage, according to a report being released today.

message from Jack Truher, April 2008

Retiree Eligibility after Layoff for Medical Benefits.

With all the recent layoffs in progress and anticipated, you may be interested in Stanford's active policy statement for 2008. Download Stanford's policy on retiree eligibility for medical benefits.

Retiree Eligibility after Layoff for children's Tuition Grant Program.

Those anticipating both retirement and imminent separation from the University as active employees may want to know if their dependent children will continue to be eligible for Stanford Tuition Grant Program (TGP). Download Stanford's active policy on TGP from here.

Individual Insurability Denials affecting Retired and Active Employees.

Denial of medical treatment by some of Stanford's insurance providers has become a recurring media report as affecting other larger subscriber institutions. Are these insurance denials happening at Stanford? A recent newspaper report on individual denail of medical benefits describes how group insurance can be eroded for individuals who are disqualified after sickness is reported. Disqualification can be based on prior conditions. If the basic premises for insurability can be nullified for the City of Los Angeles, it can happen at Stanford. Jack would like to hear of any such disqualification and unreasonable denial of individual treatments as may affect active or retired Stanford employees.

message from Jack Truher, April 2007

Stanford's retiree medical benefits are a non-guaranteed gratuity.

Lorie Johnson, president of the nurses union, has said in various explanations of a recent union contract settlement,

"We are the only hospital in the Bay Area that doesn't offer medical insurance after retirement for those hired after 1997," said Johnson, also a registered nurse. And she noted that even those with retirement packages have no contractual guarantee of their delivery.

"They could take it away tomorrow," she said. She said Stanford's wages are "behind several hospitals" and likely to be "further behind others when they negotiate their new contracts."

The Stanford hospitals' nurses union was restrained in part because Stanford has previously established boundaries on benefits by proclamation which has gone unchallenged by nearly the entire muted body of staff. Such staff passivity will continue to be exploited by Stanford management until the staff at large organizes collectively, hardly an activity under much discussion recently.

I am shocked on the point that Stanford "doesn't offer medical insurance after retirement for those hired after 1997". We know that Stanford has put limits on the medical benefit growth rates for more recent hires, but I have been unaware of any class of permanent Stanford or Hospital employee without retirement benefits? That is an ominous discovery. Is this a precedent?

Medical insurance after retirement is not guaranteed for either current retirees, or all future retirees: Provost Etchemendy reiterated this boundary for clarity and with little resistance over two years ago. For planning purposes, current Stanford staff should think of the retirement medical benefit only as a GRATUITY.

... Provost Etchemendy clarified to staff and retirees in his December 8, 2004 Tresidder meeting, "the retiree medical benefit is not a guarantee benefit."

I recorded that Etchemendy presentation. The provost was largely but not entirely correct to explain that staff had no effective contract rights to the medical benefit which all Stanford faculty and staff so wrongly believed was assured as promised. There are provisions in law as to implied contract, prevailing practices, issues of presumption. When before a jury in such circumstances, employers can lose the argument for intent and contract rights. There is little sympathy for obfuscation. Given the University's unlimited wealth for legal action, the Provost's position will surely prevail now.

Here is what Provost Etchemendy said in 2004 as to Stanford employees' non-existent rights to medical benefits:

"The retiree medical benefit is not a guaranteed benefit, so technically, from a legal standpoint, we could zero it out, and say "therefore were aren't paying it anymore". We're not going to do that. That's not the kind of employer we are. As a matter of fact, that's why we're grand fathering all these retirees. So is it possible to decrease that factor? Technically, yes it is. Would the university do it? I doubt it."

For now, Stanford's medical benefits are properly managed for most participants, viewed as a well-earned benefit for the older class of retirees covered, and so appreciated by Stanford's currently retired staff and faculty. Working employees should, however, understand that in the prevailing "race to the bottom", there are no guarantees. In absence of an employee organizing effort, nowhere in sight, Stanford's medical benefits may be denied to future retirees - in part or altogether, consistent with California's "at will" employment environment.

Because the great majority of Stanford employees have waived their rights to organize for collective bargaining rights, they should expect nothing better. Indeed, expect worse.

           -- Jack Truher

Find a September 1, 2005 essay by Jack on how medical insurance is becoming increasingly actuarial, and something about Long Term Care Insurance.

Jack's basic critique (in adobe acrobat) on Stanford's
retiree health benefits reduction plans - remains available
or a word version. with more background comment on retiree issues.

The basic critique above was followed by another of Jack's inquiries,
released on January 14-16, 2005, on the subject -

I received an announcement recently on a Stanford program on a "Mothers' Symposium & Retirement Planning Workshop"

I have known a number of women, retired from Stanford after long careers, often single, or formerly single mothers who retire into desperate poverty. This is not the rule, but it is not extraordinary either. These people generally can not afford to live in the Bay Area. This year Stanford announced a doubling of retiree medical premiums for out of area retirees. When questions were raised about these selective, extraordinarily boosted rates in the BenefitSU informational meetings, the speaker said that "costs are high for this group".

Near the end of the enrollment period Stanford's BenefitSU announced that this premium doubling was a "mistake, due to a programming error." I deal with this questionable retiree premium retreat on my Stanford retiree web site. Some staff feel that BenefitSU was admonished by higher management after having received a flurry of complaints. I think there should be an investigation of how such a blunder could have come and gone with so little explanation.

The announcement reminds me that there should be some class analysis regarding the "Changes to Stanford's Retiree Medical Plan" which are in progress. Economic pressures in medical care are inevitable. How Stanford reacts are a matter of choice. Stanford intends to reduce it's liability for retiree medical expenses, across the board, regardless of need. Three mechanisms have been put under discussion by Provost Etchemendy.

But the Provost's discussion neglects all the obvious retiree class divisions. In fact, adjusting the retiree medical coverage can be accomplished to favor Stanford's wealthy professoriate and executive class. It could favor the more common middle income staff, or it could favor those retirees among the poor and nearly poor staff.

Each of these income classes has different objectives with regard to retiree medical insurance. Group insurance performs several different functions: (a) a leveraged bargaining agent, (b) managed cost control negotiations with providers, (c) predictable costs for various treatments, (d) catastrophic insurance, etc.

(1) Wealthy retirees prefer the minimize their medical costs, but their bottom line is catastrophic protection. If one has between 5-10 million dollars in assets, then medical costs could consume even that and impoverish the wealthy too. A retiree medical plan is needed by this class which protection the bulk of their assets. The various co-payment costs are really of no concern to this class. These folks buy premium plan protection like Stanford's Triple Option plan.

(2) Middle income staff may have a home and some annuity income, but losing their home means breaking up their social network without much reducing costs. Annuities are adequate, but not luxurious. So catastrophic insurance is important, as well as negotiated cost-control through a group plan manager. They do better with large managed care providers like the Palo Alto Medical Clinic.

(3) Poor retired staff need basic health care at minimal cost, especially in their later years. They don't need much asset protection. They don't own much personal or investment property. These have been the Kaiser subscribers, and they need continuing subsidy by something close to that approach, wherever they live.

Stanford's projected changes need to be evaluated as to which of these classes are being most directly served. It seems to me that Stanford's poor retirees are being neglected. I put a link at bottom to my own review of this development which basically concludes that Stanford does not intend to protect the needs of its poor retirees. Stanford has a plan to reduce the fraction of its contribution over a 5-10 year period to half or even a tenth of its present commitment. This action will be of little concern to Stanford's wealthy retirees, but it will put another serious squeeze on poor retirees. Cost impact severity on middle income retirees will vary.

One amelioration Stanford has not discussed is a special medical insurance subsidy for retirees who can demonstrate significant or extraordinary financial need that otherwise would deny them adequate medical coverage.

Entry for December 15, 2004 Town Hall Meeting, Dec. 6, 2004, discussed proposed changes to retiree benefits Provost Etchemendy's presentation to faculty and staff is summarized by the Stanford News Service. He said of the University's intended changes: "None of these changes will effect any current retirees. (In previous announcements) this was not made entirely clear." I wonder that this may have been a partly false statement. The planned changes involve three relevant components: (1) medical benefit eligibility for those currently working and not yet retired, (2) commitment to provide retirees with a medical benefit subsidy level equal to Stanford's lowest cost medical plan, (3) some notion of parity between active employee group rate of increase in benefits and retiree group rate of increase in medical benefits cost. It is clear that future medical benefit eligibility (if any) will be based on years of service, rather than the current, simpler application of the "Rule of 75". On the second component, subsidy level, future retirees' medical benefits will be pro-rated, based on years of service. But on the third component, parity, Provost Etchemendy was unclear. He appeared to apply his parity constraint to the active vs retired groups, and not the individuals within the groups. But the two classes inter-relate. Given the parity constraint, how could the individual retiree level of subsidy be maintained, if, for example, the aggregate retiree pool increased markedly in a short time period, as compared to the active employee pool? It's possible that I am simply unclear on some of the distinctions which the Provost tried to explain. My uncertainties were not clarified in the December 6th presentation, nor in the question answers which followed. Stanford's retiree medical benefit changes announcement for active employees of October 20th, 2004, and a Stanford Report background article by Provost John Etchemendy are both worth reading.

Entry for November 20, 2004:
Stanford has belatedly announced that major overcharging errors will be reduced in this year's pricing of Stanford's retiree heath benefits. Three categories of Blue Shield retirees will have substantially less monthly costs as a result of the corrections. There was a further cost error involving a Pacificare category of retirees, which is not well explained in the BenefitSU letter of correction to retirees. The original errors appeared in BenefitSU's printed "Retiree Healthcare, Your Open Enrollment Guide for Healthcare Benefits for 2005". The errors propagated throughout the enrollment process, so correcting this blunder has been a major problem for everybody involved. The explanation we get: "As a result of questions raised by retirees regarding the pricing of our plan options, we took another look at all the retiree pricing. We discovered programmer errors that resulted in incorrect monthly cost of some of our plan options."

After receiving BenefitSU's notice of the false overcharging, I responded in writing on November 19, 2004, objecting to their oversimplified explanation for discrepancies, which nearly doubled retiree cost in one instance from $457 to $897 monthly. (Download this pdf file to desktop for Adobe Reader and/or then for Print.)

As BenefitSU's letter admits, these extradinarily overpriced benefit charges were only corrected after repeated complaints about the price increase by some affected retirees. I would like to be informed by retirees involved in this peculiar process of price control.

Entry for November 5, 2004:
This page captures my encounters with Stanford's Health Benefits plan Benefit Fairs for the years 2003-2005, including my experience of the current enrollment period. So you have a record of my skeptical struggle to understand and adapt to these benefit plans in mid-course of their development. Everybody's situation is different. This year will be the first time I actually enroll as a retiree. In the previous years, I knew I was in familiarization training. One has to learn about how Medicare interaces with Stanford's plans, and how a retiree transitions from various some status conditions to another. Yes, it's that complicated.

Every person I encountered this week was well prepared and helpful. In previous years, I left without the same sense of positive exchange in every, or perhaps most, instances. Some of that was undoubtedly my own lack of familiarization or preparation. The informational meeting and two Fairs this week were not so crowded when I arrived. I have been returning to a number of the Benefit Fairs over these three years, knowing that I had to become more comfortable with the terminology and my own family's needs within the available plans. I been maintaining my own running summary and comparison of the plans, which comparison has been updated for health benefits year 2005. (Download this pdf file to desktop for Adobe Reader display and for color Printing.)

(Correction, updating to November 20, 2004: My comparison of the plans has not been updated yet with the BenefitSU pricing corrections explained in my Nov. 20, 2004 Entry.)

I left the Retiree Informational Presentation and two of the Benefits Fairs encounters this week feeling that I was courteously and wisely advised and assisted. I got the sense that I was encountering a competent and well prepared team of professionals.

As to the the cost and value of the Health Benefit plans themselves, there is much variation. Some of the costs have changed very little for much the same coverage. Out of area dollar cost may jump from 30-46% in this single year for some retirees, who suffer from these changes in very individual ways.

My family's experience this week left me quite satisfied with the process and the resulting findings.

Here is a chronological record of links on university-faculty/staff communications concerning the proposed reductions of university contributions to employee health benefits:

(1) May 28, 2004, Stanford Daily, news story
Provost tells Fac Sen of cuts for future retirees

(2) June 2, 2004, Stanford Daily, Letters to the Editor, by Jack Truher
Retirees must educate themselves about changes in health benefits

(3) June 2, 2004, Stanford Report
Future cuts proposed to retiree medical and retirement benefits

(4) June 2, 2004, Stanford Report, Faculty Senate meeting of May 27, 2004
Retiree Medical Plan

My guess is that a reduction in benefits for retirees will be the result for all retirees, past and present. Unless the Daily article was misleading in this regard, for the University to focus the announcement only as impacting "future retirees" is just that.

Here's a few lines from the Daily story on the announcement. Check back back later. I may have a better interpretation and more facts.

"For retired staff to currently receive medical benefits, the sum of their years of service at Stanford and their age have to add up to 75. The employee also has to have worked at Stanford for a minimum of 10 years. The retiree can then receive annual benefits equal to $3,176 if he is under 65 and $2,472 if he is over 65.

The new plan would pay retirees a medical benefit equal to $100 for every year of service. Under both plans a spouse receives 60 percent of the retiree's medical benefit, and the benefits would be adjusted annually for inflation."

Jack's comment:

What the University announced is that health benefits will be reduced for everybody. Price rationing is Stanford's notion of equitable health care for everybody. Not mine. Working employees of high income will be enabled to keep up with this class-based wealth transfer with no problem. Stanford's wealthy high-ranking insider employees don't care. They live way above cost.

Who gets squeezed most in this planned cost transfer are the lower paid employees and the poorer retirees of the future, often scheduled for living already at the poverty level. For these "loyal employees", past or present, when their health care benefit costs rise, other essentials become unaffordable.

What Stanford is doing is limiting its liability for the future, most particular limiting overhead to operating expenses. Indemnification is what health care insurance is about - asset protection. The question is whose assets are being protected: the University's or the employees? The medical establishment is quite prepared to drive any of us into abject poverty in the event of a persisting, serious illness. Most important for the University to do is to make affordable options to protect employees against catastrophic loss. How will that primary objective be affected?

I have been reading Stanford's annual employee and retiree literature on health benefits for some years. There has not been any language in these annual information packets that limit employee or retiree health benefits to a fixed dollar value by any proscribed schedule projected into future years. There certainly were dollar limits in a given year. That limit was the cost of the lowest cost plan, invariably Kaiser. The University negotated plans that included such catastrophic asset protection.

If the University enters these agreements with a previously self-imposed dollar subsidy limit, what does that do to the negotiation on behalf of the employee? Beyond protecting the University's operating expenses, the employee or retiree asset protection becomes at risk, protected only by the employee's "ability to pay". The result will inevitably be that lower income employees's protection from the medical establishment's state-enforced cost recovery practices will be compromised. That is my apprehension of the moment.

What follows is background, written before May 2004:

Stanford provides health benefits to retired former employees, whose interests would be served by a readily accessible, volunteer, peer network which enhances a constructive relationship between Stanford and its retirees. Stanford tends to communicate exclusively by proclamation to subordinates. Contrary to expectations, this web site is here to assist development of an independent affililation of Stanford retirees.

Stanford's primary benefit to retirees is administration of Medicare-based health plans. There is a consistent pressure toward reducing medicare benefits to retirees, who lack any bargaining leverage with their former employers. Facing government-led payment-reductions, physicians are retiring early or refusing medicare patients altogether. HMOs have unilaterally terminated health insurance for tens of thousands of retirees in the bay area. Company sponsored retiree health insurance is becoming more costly. All over the country, companies are limiting access, terminating retiree insurance, reducing benefits, and raising benefits. Stanford tries to remain competative with prevailing retiree insurance, but is that good enough when the norm is dropping so fast? An outstanding article on these developments appeared in the San Jose Mercury on December 7, 2000. An online version can be found here .

New Entry: Stanford's requirement for loyalty from staff has often be rewarded unevenly. Some people retire into near poverty or worse. Many years ago, I became aware of lower paid employees who have exercised major influence and been major contributors in departmental activities. But their modest modest salaries did not allow for decent living conditions in retirement. Stanford's outsourcing efforts at poverty wages have compounded my perceptions in this regard. Last year, only after a student fast on main quad, Stanford's President reversed a policy from the last decade - and committed to a "living wage" for contract Union workers. Some comparable commitment to lower-paid retirees would be appropriate as well. A illustrative story on this subject appeared recently in the San Jose Mercury. I will add more personal observations on the Stanford record here eventually.

Recent interest: Here's my own interpretation of the recent and controversial medicare legislation supposedly for "prescription drug coverage", but actually for a whole lot else.

Costs for 2004: Compare the premium changes from year 2003 to year 2004 in Stanford's over-65 retiree health insurance premiums. Find some clarification of terminology on this page in the next paragraph.

Stanford's annual Health Benefits literature invariably lacks a glossory of terms. A well-written source for terms and strategy is a page from the California Medical Association on terminology. Explore the CMA home site.

A couple of cautions for 2004:

1. We have cause to be shocked by Stanford's newly limited terms for securing rights to group health insurance. Those retirees who have other health insurance options for next year, but might want to use Stanford's group health insurance in future years, should NOT select "No Coverage" as has been true in the past. Selecting this "No Coverage" option waives and disavows your rights forever to future health coverage from Stanford. The language chosen in the 2004 Enrollment Form is ominous: "Unless you choose (1. postpone coverage) or (2. active coverage), you will not be eligible for Stanford University retiree medical or dental coverage in the future". This preposterous waiver was not explained or justified in the accompanying literature from Stanford, offers no attendant benefit to the employees, and should have been highlighted by luminescent warnings that only idiots would voluntarily waiver earned retirement rights to group insurance. The University asks for a "buy-out" of an earned right to health insurance, a value which goes uncompensated. This is loss of value, and someone ought to make note of it. The real meaning of this change is hard to grasp. Work very hard, and you find about a hundred words of explanation on page seven of the "BenefitSU News for Fall 2003". There only, you find that "If you drop medical plan coverage after January 2004, you will not be allowed to re-enroll". The actual form that retirees are sent explains none of the background, and there will be some misunderstandings or errors in choices, if not outright neglect. The default for non-response appears to be irretrievable loss of insurance rights. The unintended consequences alone of this action cries out for some exposure. Anyone presented with this choice should choose "Postpone Coverage" or or remain fully covered under a Stanford plan.

2. Some early retirees, under 65, who have moved out-of-local-area geographically can expect a substantial increase of Stanford insurance premium for 2004,in addition to higher deductable costs. The more expensive "supplement" plans could cost an out-of-area retiree double last year's costs. The bargain-basement plans cost increase is less. In a typical example, the premium increases this year from $140 to $196.95. The year before, the premium was $98 or so. The deductible cost to retiree increases this year from $300 to $500 and the out of pocket from $2000 to $3500. These numbers are from reports I have received from concerned out-of-area retirees, and from University persons who have reason to know. I have yet to study the details. I suspect there is some cause for alarm to the out-of-area retirees, who usually left the Bay Area because they could not afford to live here.

Some Experience from the November 2003 Enrollment Period

When my private insurance company learns of some changes in Federal Law that might effect the company client constituencies, I get a blitz of notification to get involved in the public debate. Nothing like that happens at Stanford. Stanford's style has always been "Take it, or Leave it."

I was laid-off in 1996 after 31 years at Stanford. I have never used any of Stanford's benefits since. Zero. My spouse's part-time employee insurance is better. I studied the alternatives thoroughly, and will continue to do so. Pretty soon, we will all be stuck with medicare and what Stanford elects to allow us.

Stanford has no obligation for retiree parity with employee insurance benefits. What are the rules of equity? The government intends that medicare not keep up either. We're in a different era now. There will be times when former Stanford employees ought to have some sort of network.

Stanford's health benefits are intended to be competitive with other major employers' retiree coverage. That's what Stanford intends to do. But there's no rule of parity with active Stanford employees. In the era of "race to the bottom", it seems to me there should be some public discussion of how steep that downhill slope goes without notice.

Employees were increasingly intimidated into silence by many factors in recent years. Stanford become a much more repressive place to work in the 90s than it was in the 60s when I began as an employee. But finally self interest has to be advocated by the parties affected. Retirees at Stanford have no representation, and none is expected in our lifetime. But some moderate self-expression and adult participation would be a welcome growth of relationship, both for employees and retirees of what was once realistically known as "the Stanford family".

The increasing transfer of cost for health benefits to retirees over age 65 at Stanford is a result of the cost-profit vs benefit struggle involving hospitals, insurance companies and medical providers, employers, government political interests, and other constituencies. Maintaining functional parity of retiree health benefits, as compared to active employees, is not a legal requirement of the University. Each of us retirees would do well to form an informed opinion on whether Stanford's transfer of cost ratio to retirees over age 65 is inevitable, reasonable, or in the long-term interest of active employees.

A point of interest is about Medicare part B: Can you escape the ten percent per year surcharge in part B medicare premiums, additively, that occurs if, for any reason, you choose not to pay for part B? Answer: the government medicare web site answers that. But getting that surcharge forgiven isn't always easy to accomplish in practice.

A succinct discussion of health care for elders by a distinguished physician educator is worth a look.

The following links might be helpful in the future. The first two items relate to Medicare drug benefit bill in Congress, November 2003.

Stanford Staffers

Womens Interchange at SLAC

Check for Current Stanford Public Events

Weekly Stanford Lecture on Mental Health (Grand Rounds)

California Advocates for Nursing Home Reform

Gerontology & Nursing care

End of Life Issues

Add your suggestions to these interests already expressed by Stanford retirees:

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Retirees of Stanford