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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 111657
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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When Federal annuitants with health insurance become 65,

Customer Question

When Federal annuitants with health insurance become 65, Medicare Part A starts up for them, and virtually all their inpatient hospital expenses are paid by Medicare.
Nevertheless, the premium they have been paying through the Government for private health insurance is unchanged, just as though the insurance company is still paying their hospital bills! THIS is my concern. It seems wrong, especially in light of the below law:
5 USC 8902, Para i. Contracting Authority. Rates charged under health benefits plans described by section 8903 or 8903a of this title shall reasonably and equitably reflect the cost of the benefits provided.
Does the above require a premium adjustment when there is a sharp drop in cost?
Submitted: 1 year ago.
Category: Legal
Customer: replied 1 year ago.
How strong is your answer - how hard would it be to prevail against opposing counsel? Govt agency, etc.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Unfortunately, costs for supplemental coverage when one has medicare are set by the insurers. These rates are not based only on the fact that you are using less, but the fact that when someone reaches medicare age the chance of needing costly procedures that may not be fully covered under medicare are more likely to occur.
The law says, as you stated above, "reasonably and equitably reflect the cost of the benefits provided" and that means not just benefits provided to you, but benefits provided to all parties under those plans, because insurance is a "shared risk," which means that even though they may not be spending high care costs on you, there are others that they are paying high costs of care for and that is what "reasonable and equitable..." refers to.
Pursuing them on an individual basis for an individual plan charge would not be valid, you would have to prove they are not providing risky coverage to all parties eligible for that insurance to justify the reasonable and equitable charges they are seeking for the cost of their plan.