State's 1.43% Bucks Trend

MAY 2012 VOICE: With national health costs struggling to stay below 100% increases and our state’s public sector critics crying “budget busters”, the Commonwealth’s Group Insurance Commission’s (GIC) FY13 rate increase of just 1.43% has to be headline news.

The new premiums, well below the rate of inflation, is certainly good news to state, teacher and municipal retirees the GIC insures. It’s the lowest insurance premium increase within its eleven different plans since 1999. Rate changes are effective for Fiscal Year 2013, which begins July 1, 2012.

Of most importance to retirees is the GIC’s Optional Medicare Extension (OME) Plan with CIC coverage, which increased 4.4%. This represents a total monthly premium of $46.76 (90/10), $64.81 (85/15) and $82.86 (80/20) for state retirees.

The OME rate increase is largely the result of a 10% jump in the use of prescription drugs by the plan’s 57,000 subscribers.

“It was great to be able to deliver some good news to our members,” said GIC Commissioner Anne Paulsen, who is the Commission’s retiree representative. “One of several things working in our favor was that the mild flu season kept utilization a little lower than expected.”

Following earlier expectations, the GIC voted not to increase copayments or deductibles for the coming year. The last major increase in out-of-pocket costs was in February 2010, when the Commission put an  annual deductible in place for non-Medicare enrollees. See related article on prohibiting mid-year changes, page 3.

Retirees, enrolled within UniCare’s Basic Indemnity Plan, will see a 3% increase for both individual and family coverage. UniCare’s Community Choice and Plus plans posted a -4.2% and a
 -0.05 decrease in the monthly rate respectively.

Harvard Pilgrim’s Independence and Primary Choice Plans will see a 0.3% increase and Medicare enrollees a 1% increase. Tufts Complement Medicare Plan will increase 1.8%, while the Preferred plan decreases -6%. Tufts non-Medicare Navigator and Spirit plans will increase just 1.7% and 1.3% respectively.

Fallon’s Select Care and Direct Care plans will increase 3.5% and 1.5%, while their Medicare rates remain unchanged. Health New England enrollees will see a 1.8% increase for the non-Medicare plan. And, Neighborhood Health Plan posts the largest increase for FY13 at 6.2%.

Premium contribution rates for municipal retirees and employees, insured under the GIC, are set locally through either coalition bargaining (Section 19) or an agreement reached with a Public Employee Committee (PEC). However, those local retirees, insured under the GIC, have access to the same insurance plans and coverage as state retirees.

The decision to enroll in the GIC is a local option decision. As of July 1, there will be 9 cities, 24 towns, 8 Regional School Districts and 4 Planning Councils in the state plan, accounting for 56,688 municipal insurance contracts. Rates for local retirees and employees, not insured under the GIC, are established locally.

All told, as of June 30, 2011 the GIC enrolls over 188,000 retired and active employees, accounting for over 350,000 insured lives.