General Motors Corp. and Chrysler Group LLC retirees are flocking to Metro Detroit optometrists and dental offices for eye exams and teeth cleanings before those longtime benefits vanish July 1.
The benefit cuts are among broader changes approved by the United Auto Workers in May as GM and Chrysler sought to restructure before filing for bankruptcy protection. The concessions were part of an amendment to the UAW’s 2007 agreement with the automakers establishing a union-run health trust fund for retirees, also known as the Voluntary Employees’ Beneficiary Association or VEBA.
The cuts affect nearly 350,000 unionized GM and Chrysler retirees and will mean painful changes for those used to rich benefits and fewer out-of-pocket medical costs.
Along with losing dental and vision benefits, retirees will shoulder higher copayments for emergency room visits and prescription drugs. Catastrophic plans will no longer be offered to retirees or their surviving spouses. And retirees will lose some drug coverage, including benefits for erectile dysfunction medication.
The benefits are set to end June 30. Retirees are scrambling to get costly dentures and new pairs of glasses, providing a windfall for dental and vision offices at a time when many patients are delaying care because of higher copayments and tightening budgets.
“It’s been nuts,” said David Borlas, a dentist in Chesterfield who has been so busy lately he frequently works straight through his lunch hour. “Once the announcement came out, people started coming out of the woodwork. We’ve got people jammed on top of people.”
But these same businesses recognize the rush is temporary and fear work will dry up once the cutbacks go into effect, further eroding a once reliable source of business for many medical providers.
Medical experts also worry retirees will hold off on routine care, which can help prevent minor problems from turning into costlier ones in the future.
Rupert O’Brien, chairman for the retiree chapter of UAW Local 5960 in Orion Township, said members have been rushing to get dental and vision appointments but have run into long waiting lists and encountered offices booked through the month.
“A lot of them don’t know what they’re going to do,” said O’Brien, a GM hourly retiree whose chapter has about 6,000 members.
Medicare, the federal health care program for seniors and people with disabilities, doesn’t cover vision or dental. The only way to get the coverage is to buy it, he added.
“It’s going to be quite a bit out of a retiree’s pocket,” O’Brien said, noting that purchasing dental coverage will cost some couples about $80 per month.
Temporary, for now
For now, the cuts are temporary and intended to conserve cash in the VEBA, said Kristin Dziczek, director of labor and industry for the Ann Arbor-based Center for Automotive Research. The changes could be reversed or upheld once the UAW takes over the health trust next year.
“It’s a whole new ballgame on January 1,” she added.
Still, dentists and vision care specialists already are bracing for the cutbacks. And others in the industry worry the cuts could go deeper, resulting in higher out-of-pocket costs for routine medical visits, a trend quickly becoming the standard for other employer-backed health plans.
“This is our window of opportunity,” said Scott VanderVeen, a dentist in Clarkston whose office has extended hours, postponed vacations and added full days to accommodate the influx of patients. “We realize our business will slow down in July.”
Borlas, the Chesterfield dentist, who started practicing dentistry before the UAW began offering dental insurance in the mid-1970s, fears retirees will revert to the old mindset of basing medical decisions not on quality but on what they can afford.
“The common theme back then was they’re not going to opt for a root canal or a crown for an infected tooth, but ask to pull it, which is a much lower level of dental care. That’s what people could afford,” said Borlas, an executive director for the Macomb Dental Society. “And then, came along dental insurance. Now, the pendulum is swinging back the other way.”
Dentists also affected
Dentists aren’t the only health professionals seeing a boom and fearing a bust.
Dr. Kevin Everett, an ophthalmologist with the Henry Ford Medical Group, said his office in Sterling Heights has seen about a 15 percent bump in calls from retirees seeking to make appointments before July 1. Revenue is up by at least 10 percent for optometrist visits, he said.
“Considering the economy, that’s pretty dramatic,” Everett added.
However, he worries the uptick will soon give way to a lull after July 1. Retirees may stop offices visits, even for illnesses like glaucoma and cataracts, which are covered under their medical benefits. Vision insurance typically only covers routine eye exams and the purchase of glasses or contacts.
“We’ve always had patients confused about that, but now it’s really bad,” Everett said. “Many are going to damage themselves sitting home with problems thinking they can’t be seen and letting them get worse.”