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In a significant administrative shift, the City of Montgomery is set to transition from Blue Cross Blue Shield of Alabama to AMWINS for its Medicare-eligible retirees’ insurance. This change promises a substantial reduction in monthly premiums, amounting to nearly $700,000, and an estimated $2 million in annual savings for the city, according to the mayor’s office.
The impact of these savings opens up the possibility for the city to offer more diverse options to its retirees, including expanded drug and treatment coverage. Additionally, it allows for the capping of more monthly fees, substantially reducing the out-of-pocket expenses for retirees.
Retirees have expressed their enthusiasm for these changes. The significant reduction in the cost of medications — with some now costing only $75 per month, and others like insulin capped at $35 — is a huge relief for many.
There has also been confusion and misinformation regarding this change. To clarify, Montgomery’s supplemental insurance plan for Medicare-eligible retirees is a self-insured system. The city collects premiums and pays medical claims, contracting a third party for managing enrollment, claims processing, and negotiating with providers.
Previously, the city collaborated with Blue Cross & Blue Shield of Alabama to manage these aspects. Under this arrangement, when retirees sought medical services, Medicare would cover most costs, and the city would cover the rest, facilitated through Blue Cross & Blue Shield.
Recently, Montgomery Mayor Steven L. Reed exercised his veto power against a City Council ordinance that sought to intervene in the management of the City’s supplemental health insurance program. This move not only maintains a coverage plan that benefits retirees with lower premiums and minimal out-of-pocket expenses but also saves the city from a potential $6 million penalty for breaching contracts with providers.
Montgomery stands out among Alabama’s “Big Ten” cities for offering supplemental insurance to its retirees, further underscoring its commitment to their well-being. This is complemented by its unique approach in offsetting coverage costs.
In a close 5-4 decision, the City Council upheld Mayor Reed’s veto, ensuring the continuation of the proposed changes to the supplemental health insurance program.
The new arrangement brings in AMWINS, a benefits broker, to replace Blue Cross in managing the paperwork. AMWINS is collaborating with United American Insurance, Express Scripts, and others to provide a more comprehensive and affordable supplemental package. The city has ensured that the same doctors and pharmacies are included in these new networks.
To ensure clarity and address any concerns, the city has hosted several informational meetings with AMWINS and United American teams.
Mayor Reed commended the efforts of the City’s finance team, led by Betty Beville, for their role in orchestrating this beneficial change. He also expressed gratitude to the City Council for their open-minded approach and diligent fact-checking in the process. This administrative change marks a significant step forward in enhancing the healthcare benefits for Montgomery’s retired community.
