OME Plan Costs Drop

MARCH 7, 2009: Officials with the state’s Group Insurance Commission (GIC) have announced the insurance rates for FY10, which begins on July 1. The average increase across all GIC sponsored plans is 3.1%, with an actual price reduction for the Optional Medicare Extension (OME) plan.

While insurance costs have risen across the Commonwealth and country between 5-6% on average, the GIC has once again managed to come in with significantly lower increases. This is good news for the 325,000 state retirees and employees, retired teachers, and retired and active local employees now enrolled in the state insurance plans.

Several factors contribute to lower overall premium costs for the GIC. First is the sheer size of the plan and the negotiating power that comes with insuring several hundred thousand members. Next are techniques employed by the GIC to manage costs and benefit utilization. Finally, is the controversial issue of out-of-pocket costs that are charged too retirees and employees, which tend to be higher than other public sector copayments and deductibles.

In February, GIC officials voted to increase copayments and deductibles across most non-Medicare plans. However, retirees enrolled in Medicare supplement plans, such as the OME, will witness an increase in their prescription drug copayments. The increase in both retail and mail order drug copayments, the first in 7 years, will result in $19 million in additional out-of-pocket costs to enrollees.

As of July 1, 2009 Retail Pharmacy copayments will be $10/$20/$50, and Mail Order copayments $20/$50/$110. Further information will soon be mailed to each GIC insured retiree and employee and will be contained within the upcoming May edition of the Voice.