Union Protests Changes to Health Care Package

The University plans to increase the price of a health care plan for some Harvard retirees, a move objected to by the Harvard Union of Technical and Clerical Workers (HUCTW). The University says that the "modest increases" are necessary to defray increasing costs.

Changes to the current retiree health care plan include the introduction of a $250 annual deductible, the introduction of a 20 percent co-insurance rate, and an out-of-pocket maximum of $1,000. The University announced the cuts earlier this month. The University announced the changes in June of this year and initiated special negotiation sessions with HUCTW in September to discuss the proposal.

A letter to HUCTW members from union officials Sunday stated that they are facing a "serious new problem on retiree health."

"In the past week it has become clear that the University is planning to implement changes in the retiree health program to which HUCTW has not agreed," the letter reads. "HUCTW representatives have argued, in the UBC [University Benefits Committee] and in other policy discussions with Harvard administrators, that a $1,000 out-of-pocket maximum is too high for lower- and middle-income retirees with limited income and assets."

HUCTW Director Bill Jaeger emphasized the hardships imposed by the new increase in healthcare costs.

"We have some retirees who are living on $20,000 or $30,000 a year for whom the potential of a new $1,000 health care cost could be catastrophic," Jaeger said.

However, according to University spokesperson Kevin Galvin, University data shows that the average retiree would still spend less than $500 on health care per year.

Even with the increases, Harvard still offers one of the top-tier health-care plans among corporations and universities, according to University officials.

Galvin said that about two-thirds of Harvard retirees in Medex—the University’s most popular retiree health care package—currently pay no premium. He added that this group pays only nine cents in average out-of-pocket medical expense, meaning costs incurred after payment of the annual premium.

"The changes to our health care plans represent modest increases in what benchmarking shows are very generous plans when compared to university peers nationally and businesses in the local market," Galvin said.

HUCTW’s letter to the University called for a safety net for the "most vulnerable" retirees—that is, retirees who are sick or require expensive drugs.

"Even if there are only a few people who are going to be hurt by this, we’re deeply concerned about this," Jaeger said. "The University has said it is willing to discuss it, but it hasn’t happened yet and that’s what worries us."

The University said that they are not against instituting a safety net for vulnerable retirees and are pursuing the idea.

"We remain interested in discussing the creation of a hardship fund to help defray medical costs for some of our most vulnerable retirees," Galvin said. He added that while the University is increasing co-payments for medical visits, it is not increasing the payment ceiling, which means that people will actually reach the threshold for co-pay reimbursements after few visits.

Galvin also noted that the University has not adjusted the health care contribution for retirees in over a decade, despite the increasing cost of health care.

"Health care premiums have risen 8 percent for individuals, while Harvard’s plan has only increased by 3 to 5 percent," Galvin said, adding that the cost to the University of medical drugs has increased by approximately 20 percent over the past two years.

—Staff writer Mercer R. Cook can be reached at mcook@college.harvard.edu.