TVA Retirees Misled About Their Medicare Options

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A growing number of U.S. employers are directing their retirees to a private  Medicare exchange (PME) to buy Medigap coverage.  Unfortunately, many of these seniors who purchased their Medicare Supplements through a PME may not have received fully transparent information about their options for purchasing replacement plans.  As a result, some of these seniors may end up paying an extra  $20,000 over the next 20 years for plans that provide absolutely no extra benefits.

For  example, the Tennessee Valley Authority (TVA), a federal agency, terminated its retirees' health plan in 2017 and directed about 14,000 retirees to a new TVA-sponsored retiree health plan administered by a PME known as Via Benefits (formerly OneExchange). 

Many employers provide a healthcare  "credit" or "stipend" to their retirees which helps reduce the cost of the PME's plans..  However, without a healthcare credit or stipend, purchasing Medicare insurance through a PME could be an unwise and costly financial decision.  This is exactly the case with the TVA-Via Benefits retiree health plan.

Around 14,000 TVA retirees signed up through Via Benefits.  Of those 14,000, only 6,000 receive credits to offset Via Benefits' high prices.

It was stunning to learn that the remaining 8,000 TVA retirees purchased their plans through Via Benefits with no credit or subsidy to offset Via Benefits' high rates.  Did Via Benefits make it clear that these folks were not required to purchase their new plans through Via Benefits?  Did Via Benefits make it clear that many of its rates are substantially higher than plans available directly from local agents or brokers? Were retirees intentionally misled about their options?

The accompanying chart clearly shows the disparity of rates for Via Benefits' plans when compared to other plans readily available to retirees from local agents or brokers.  What the chart does not show is that there were 23 insurers with rates lower than Via Benefits' lowest rate offered, which was Cigna at $168. 

There were many "A" rated insurers in this group of 23 with substantially lower rates than those offered by Via Benefits, but retirees were never notified they were free to purchase from these insurers.