GM tries to soften the blow to retirees

GM will help its salaried retirees wade through their new health-care decisions.

Detroit Free Press

DETROIT — One day after General Motors Corp. surprised 97,400 salaried retirees with news that it no longer will provide group health benefits for those 65 or older, it rushed to assure them that a plan is in place to make the transition to Medicare plan choices as seamless and helpful as possible.

The automaker and Extend Health, a San Francisco company working with GM to help retirees find affordable Medicare plans, have devised a new system to try to ensure retirees won’t get inundated with insurance pitches and can find good, affordable coverage, the Detroit Free Press has learned.

They want to avoid the confusion that faced salaried Ford Motor Co. and Chrysler retirees in the past two years, when people overwhelmed Extend Health’s toll-free line and often left insurance information seminars with grocery bags full of complex and conflicting literature from numerous companies.

“We just feel betrayed,” said Dick Zaremba, 74, a Chevrolet skilled-trades general foreman who lives with his wife in Sterling Heights, Mich. But, he added, “We’re still processing the information.”

Zaremba’s wife, Janice, 66, took a $140,000 buyout from her hourly GM job last year and waived her health benefits because she thought she could be covered under her husband’s GM plan. Now she thinks she’ll have to go back to work.

“We saved our money — don’t get me wrong — but what happens if you can’t get good care?” she asked.

Dick Zaremba, who has had heart surgery and prostate cancer, takes 10 medicines; his wife needs two.

“We know that GM is going through hard times now — common sense tells you that — but by cutting us off like they did, giving us just $300 a month, it’s not nearly going to compensate what we’ve got to pay,” Dick Zaremba said, referring to GM’s additional pension contribution.

Under the joint GM-Extend Health plan:

UMedicare will let GM retirees sign up for plans beginning Oct. 15, a month before open enrollment begins for others.

UStarting Sept. 22, retirees will get packages from Extend Health. Each will be assigned a time period to call to speak to a certified benefits counselor. The times will be assigned alphabetically and by geography, because the 40 companies that Extend Health works with are not available in all states.

Extend Health will offer its own informational seminars that insurers won’t be able to attend.

“This is about controlling the message,” Bryce Williams, president and chief executive officer of Extend Health, said. “Our sole function is to provide world-class information, free of any noise and pressure” from insurers.

GM announced the changes, which take effect Jan. 1, to offset $3.3 billion it spent last year for retiree health care. The figure covers 442,400 retirees, including hourly workers.

Salaried retirees will receive $300 per pensioner, a taxable contribution to their pensions, to offset the cost of the Medicare plans they purchase. Hourly wage retirees’ benefits are not affected by the changes announced Tuesday.