At recent meetings with the Railway Labor Organizations constituting the Policyholder under GA-23111, a detailed study of the premiums and benefit payments under the various Plans was made. It was agreed that the following payment rate changes would be made for coverage effective June 1, 2000:

Plan A The monthly payment rate for Plan A will remain at $6 for employee coverage and $7 for dependent coverage effective June 1, 2000.

Plan B The monthly payment rate for Plan B will remain at $16 for coverage effective June 1, 2000.

Plan C Due to the rise in the cost of medical treatment caused by inflation plus the additional utilization of medical care services, changes in the monthly payment rates for coverage effective June 1, 2000 will be as follows:

t Plan C for employees or dependents increases from $265 to $285.
t Plan C for each student child decreases from $55 to $50.
t Plan C for each incapacitated child increases from $110 to $130.

Plan D Revisions to Plan D were made effective June 1, 1999 and provide benefits equal to or greater than any standard Medigap Plan. The amounts paid under Plan D for prescription drugs continue to increase at a rate of 21% from the previous year with similar levels expected in the next few years. Due to the continuing increase in the cost of medical services (particularly the cost for prescription drugs) covered under Plan D, the monthly payment rate for coverage will increase from $165 to $190 for coverage effective June 1, 2000.

Individuals participating in Plan D cannot change their coverage until the next open enrollment period.

Plan E The monthly payment rate for Plan E will remain at $103 for coverage effective June 1, 2000.

Plan F A new Plan F was created June 1, 1999. Plan F has benefits identical to Plan D except that it does not cover prescription drugs. The medical benefits, other than prescription drugs, are equal to or greater than any standard Medigap Plan. The monthly payment rate for Plan F will increase from $98 to $102 for coverage effective June 1, 2000.

Individuals participating in Plan F cannot change their coverage until the next open enrollment period.

Complete details of GA-23111 eligibility and benefit provisions are contained in the GA-23111 benefits booklet which can be obtained by calling United HealthCare at 1-800-809-0453.

Questions & Answers on GA-23111 Rate Changes

Why do the premiums for Plans D and F go up every year?

17. United HealthCare examines the amount of benefits paid out each year by each plan under GA-23111 along with the estimated impact of health care inflation (expected to be 6% for medical care and 21% for prescription drugs). The premium rate for Plan D (or Plan F) depends almost entirely on the level of benefits paid out. As these benefit dollars increase, the premium rate must increase at a similar rate.

18. Why is the premium for Plan D going up $25 while the premium for Plan F is increasing only $4?

19. The difference in the rate increases under these two plans is impacted by the cost of the prescription drug benefit. Plan D and Plan F provide the same benefits except that Plan D provides coverage for prescription drugs and Plan F does not. The amount of benefits paid is influenced by the number of times insured members receive medical care, and the cost of that care. In recent years, the increased use of prescription drugs, along with the cost of those medications, has been the major factor impacting Plan D premium. Prescription drug costs are expected to increase 21% next year.

20. What is the prescription drug benefit under Plan D?

21. For drugs you purchase locally at a participating pharmacy, you must pay the first $250 each calendar year. Thereafter, you must pay 50% of the discounted cost of the drugs you purchase at the pharmacy.

You can also get your drugs by mail for $20 for each prescription for a generic drug and $40 for each prescription for a brand name drug. You can get up to a 120-day supply for each prescription.

There is a maximum benefit of $5,000 on all drugs purchased in a calendar year.

22. Why is there a deductible on my prescription drug purchases from the pharmacy?

23. In spite of the advantages of using the mail order pharmacy benefit, many members continue to purchase many of their drugs at the local pharmacy which could be purchased through the mail. This activity increases the cost of the prescription drug benefit because it costs less to provide drugs through the mail than it does to provide them through a local pharmacy. A deductible and co-insurance was added to discourage this and encourage the use of the mail order pharmacy benefit.

24. When can I change from Plan D to Plan F?

25. You cannot change to Plan F until an open enrollment period. The next open enrollment period will be in December 2000, with changes effective on January 1, 2001.

26. Will GA-23111 benefits change?

At this time no benefit changes are planned. However, if costs continue to rise, changes in plan benefits may be needed to help control the cost of the plans. We will continue to strive to find the right balance between benefits and premiums for the majority of railroad retirees.