UofM Changes to Retiree Health Insurance (For Individuals 65+)

UofM Changes to Retiree Health Insurance (For Individuals 65+)

May 14, 2024

For long-time University of Michigan employees, one of the greatest benefits available is access to health insurance in retirement. Given that this is a rare offering from employers, it is worth taking advantage of through the UofM system!

Although Medicare supplemental plans have been available for many years, UofM decided to make a significant change for retirees over age 65, effective January 1st, 2024. The Medicare supplemental plans that were previously offered have been changed to Medicare Advantage plans. I have heard from many clients that the transition has been unexpected and confusing to navigate. For these reasons, I wanted to provide some additional information and resources for your consideration.

Why was this change completed?

There were three primary reasons the University of Michigan shared as to how they reached this decision.

  1. In response to previous feedback from retirees
  2. To offer access toSilver Sneakers which provides online fitness classes and some in-person fitness classes in local gyms
  3. To lower monthly premiums

How might this change your coverage?

The University of Michigan has indicated that the copays will remain the same, and in some cases, they may be less than the previous plans offered. The coverages should also remain the same. The primary difference will be in terms of what providers will accept the new coverage. For Michigan residents, there are three plans available: Michigan Care Advantage, U-M Premier Care Advantage, and Medicare Advantage PPO. Here are the online directories you can utilize to determine if your doctor is covered through one of these plans.

                Michigan Care Advantage

                U-M Premier Care Advantage

                Medicare Advantage PPO

These lists are critical for retirees already living outside of Michigan, as well as retirees considering moving to another state upon retirement. If you already know you would like to relocate in retirement, it is important to look through these options and understand the associated costs when putting together your retirement projections.

For Michigan residents, the options are the most flexible because of the three different plans available. For non-Michigan residents, the options become more challenging because you will only have access to the Medicare Advantage PPO.

What should you do about it?

The most important next step is to educate yourself on the new options available. The University of Michigan has a lot of great resources online to learn more about the different plans available and their associated benefits:Retiree/Survivor Health Plans.

I have had many clients ask if this change warrants seeking private coverage outside of the University of Michigan. For most individuals, the answer is going to be no. Many of the benefits offered through UofM are still more comprehensive than private coverages. For example, these plans still cover 100% of outpatient surgeries, whereas many private coverages have copays.

The costs are also still extremely competitive to the private market, given that UofM is paying for a notable portion of the premiums.

Medical insurance is a critical part of long-term planning for retirees. Given that the recommendation for how to proceed is dependent on an individual’s circumstances, it is best to consult with your financial advisor, an HR professional, or a Medicare specialist before making any changes.

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