IS TVA INTENTIONALLY MISTREATING ITS OLDEST RETIREES?

In response to a request for information under the Freedom of Information Act (FOIA), TVA has revealed that only 43% of its retirees in the retirees’ health plan receive healthcare credits to offset Via’s higher Medigap rates.  That means the remaining majority  (57%) of TVA retirees who enrolled in Via’s plans receive no healthcare credits/subsidies of any kind to help offset Via’s higher rates.

TVA’s response to the  FOIA request shows that, of the  7,626 retirees who signed up with Via, 3,256 (43%) receive credits.  The remaining 4,370 retirees (57%) receive no credits.

It is extremely difficult to understand why those 4,370 TVA retirees who receive no healthcare subsidy would voluntarily purchase their plans from Via when they were free to purchase their plans directly from insurance companies at lower rates - some plans at substantially lower rates. 

Some who have reviewed this issue argue that many of the retirees who received no healthcare credits and unwisely signed up for Via’s high cost plans were just too lazy to research and find better options.  It is probably true that some retirees may not have properly researched their options. However, the argument that “laziness” was the primary reason 4,370 retirees made an unwise decision when they purchased their Medigap plans from Via is patently absurd and is insulting.

There is no doubt the vast majority of retirees naively trusted TVA and Via and relied on misleading information about Via’s rates, resulting in some purchasing plans with rates 50% to 100% higher than purchasing from local agents.  These retirees may pay an additional $10,000 to $15,000 over their remaining lives for insurance that provides absolutely no extra plan benefits. If just half of the 4,370 pay an extra $10,000, they will collectively pay Via and extra $22,000,000 for insurance that provides no extra benefits.

TVA also revealed that those retirees who retired prior to calendar year 2002 were not eligible to receive healthcare credits/subsidies.  That means the the 4,370 who receive no credits include the majority of TVA’s very oldest retirees. 

It is very troubling that the retiree healthcare plan was designed in a way that would cause financial damage to TVA’ s oldest retirees and favor its younger retirees.

Most of the retirees who retired before 2002 :

• Are TVA’s oldest retirees.
• Pay higher rates for insurance purchased through Via than TVA’s other retirees.
• Receive no subsidies or any other help from TVA to offset Via’s higher rates.
• Have lower disposable income than TVA’s other retirees.
• Receive lower Social Security income than TVA’s other retirees.
• Receive lower pension income than TVA’s other retirees.
• Have more serious health issues and incur higher health costs than TVA’s other retirees.
• Believed Via when Via erroneously told them that Via’s plans are competitively priced.
• Believed Via when Via told them in advertising material that Via was their “trusted advisor”.
• Are more trusting than younger retirees and less likely to scrutinize details, making them more vulnerable to misleading information

Why in the world would TVA design a retiree health plan that hurts TVA’s oldest and most vulnerable retirees?  The answer may be simple - it appears TVA did not design the plan. It appears Via took TVA retirees and forced them into Via’s pre-existing retirees’ healthcare plan model, much like pushing a round peg into a square hole - it was a bad fit for many and likely resulted in significant financial damages for those retirees.

Via has other retiree health plans across the nation that reportedly work well for retirees of other large employers.  Why does the Via plan work well for other employers’ retirees but not TVA’s retirees? It appears that other employers provide healthcare credits to ALL their retirees - not just a certain group.  That way, all retirees receive the benefits of a credit to offset Via’s higher rates. Unfortunately, only 43% of TVA retirees who signed up with Via get a healthcare credit from TVA to offset Via’s higher rates.  The remaining 57% get nothing but a raw deal.

Based on the foregoing, it is clear that TVA’s oldest  retirees were not treated fairly in this deal. Was that intentional by TVA?  Probably not. Based on discussions with TVA executives, it appears that TVA did not know about Via’s higher Medigap rates until about six months after Via took over the healthcare plan. Via finally owned-up to its higher rates after retirees tipped off TVA.

TVA is now fully aware that Via’s rates in many cases are much higher than buying from local agents and that many of its oldest retirees are needlessly paying higher rates but has taken no action to correct the situation.  It remains unclear why TVA has done nothing to correct this inequitable treatment of its oldest retirees or at least make sure that all those who retired before 2002 are made aware they may have paid too much for their plans they bought through Via.