Health Insurance Bids Now Under Review

Retirees Caution Against Cost Shifts & Benefit Erosion

The September edition of the Voice not only captured the attention of Association members, but also that of elected officials and the state’s Group Insurance Commission (GIC).


Leading off our September newsletter was a story titled “GIC EYES MASSIVE HEALTH PLAN OVERHAUL”, where we described the ongoing process by which all GIC health, pharmacy and mental health plans are up for renewal in 2018. This process may result in changes coming to plan offerings, benefits and costs.


Following the newsletter’s distribution in August, the Association has received inquiries from nervous members, concerned state and local officials, as well as feedback from GIC officials.


“This past January we were caught by surprise when the GIC proposed the 2nd major increase in copayments and deductibles in as many years. By the time retirees and active employees were made aware of what was coming, decisions had been made and it was too late,” said Association President Frank Valeri. “I hope that 2018 has a different outcome and we will not be blindsided again. 


While it is still too early to know what the plans, benefits and costs will be next year, we’re not leaving anything to chance.


“Retirees are depending heavily on their access to quality affordable health insurance. The more expensive things become, the harder it is for our members – especially elderly retirees, who are less likely to qualify for Medicare because they were career public employees. I hope the GIC makes the human impact their top concern as these decisions are made.”


Mass Retirees officials are particularly concerned about the impact of plan design changes and higher costs on non-Medicare Retirees. Tens of thousands of public retirees, who began work in public service prior to 1986, do not qualify for either Social Security or Medicare. These “non-Medicare” retirees are enrolled in the same health insurance plans as active employees, paying the same copayments, and, more recently, deductibles.


There are currently some 21,000 state retirees over the age of 75 and 7,800 over age 85 receiving benefits from the GIC – with thousands more retired teachers and municipal employees enrolled within the state’s health insurance plans. State pension benefits for those over age 75 average under $22,000. For municipal retirees the average benefit remains well below $20,000 for older retirees.


At present, some 435,000 retirees, active employees and their dependents receive health insurance benefits through the GIC. There are currently 45 municipalities participating in the GIC, enrolling all of their retirees and active employees in the state plan. Another 62 school systems enroll their retired teachers.


“When you look at the number of people enrolled under these plans the sheer scope and size is enormous. We believe more of an effort needs to be put into leveraging the size of the GIC to get the best possible deal for enrollees,” says Legislative Director Shawn Duhamel. “Retirees understand they must contribute toward their insurance and pay reasonable out-of-pocket costs. But increasing costs on people with fixed incomes should always be the last option.


“Policymakers have to take into account that many retirees receive little to no Social Security and older retirees have very modest pension benefits. For many of our members, accessing their health insurance benefits is quickly becoming a luxury they cannot afford. This is not a fair nor effective long-term policy.”


As reported in our September edition, the GIC is currently reviewing bids on all health plans, pharmacy benefits and mental health providers. Analysis, discussion and negotiations will take place over the coming two months, with the pharmacy vendor scheduled to be selected in December. Health plan providers will be selected in late January, with FY19 premium rates set in February. (See timeline page 3.)