MAY 2005 - Medicare Extension Increase “Moderate” At 6.5% - Members, insured through the state's Group Insurance Commission (GIC), can expect to experience a case of sticker shock at the newly approved insurance rates for FY06. Beginning with their June 2005 pension check, many of the retirees and survivors, insured by the state, will pay 14% more on average.

Monthly Increase

The majority of GIC retirees and survivors are enrolled in Medicare and thus are members of one of the state's Medicare supplement plans. Some 41,389 state retirees and survivors and 6,377 retired municipal teachers (RMT) are insured under the Optional Medicare Extension (OME) plan. Rates for those, insured under the Medicare OME plan, will increase approximately 6.5% for state retirees and 16.6% for RMTs.

The increase translates to a monthly premium of $41.52 for state retirees/survivors at the 90/10 split and $57.82 for those retiring after 7/1/94 at the 85/15 split. Editor's Note: All premiums shown include CIC (Catastrophic Insurance Coverage) and Basic Life. All RMTs remain at a 90/10 split regardless of their date of retirement and will pay a monthly premium of $53.68 for OME coverage.

Retirees, insured under the GIC Indemnity Plan and not Medicare eligible, can expect an average rate increase of about 16.7%. Those retirees at 90/10 will pay a monthly premiums of $88.26 (individual) or $201.13 (family). Retirees at 85/15 will pay premiums of $118.45 and $269.37 respectively. RMTs, again at 90/10, will pay $94.65 and $223.57.

RMTs represent retired teachers from 73 school districts, which opted decades ago, to participate in the state-run insurance plans governed by the GIC. In total, more than 10,000 retired teachers are insured by the state, but in a separate pool than state retirees.

“I know that the higher premiums are a concern to some RMTs. However, on the positive side is the fact that all RMTs are locked in at 90/10 regardless of their retirement date,” explains Association President Ralph White. “Another major factor to keep in mind is that, in many cases, the RMTs have a better deal through the GIC than they otherwise would at the local level.”

HMOs Prices Move Higher

Continuing along the trend of rising insurance premiums, all eight GIC managed care providers have come in with higher prices for most of the plans that are offered. Similar to the OME plan, most retirees who are insured through one of the GIC's five Medicare HMOs will see a slight increase in their monthly premium or even a decrease, depending on the plan.

However, the exception to this is the Medicare plan offered by Harvard Pilgrim, which will increase 17%. Retirees will pay a monthly premium of $23.98 (90/10) or $35.97 (85/15). Non Medicare retirees under Harvard Pilgrim will face an increase of 13.2%.

Members, insured through one of the two Medicare plans offered by Tufts or through the plan offered by Fallon, will actually see a decrease in their premium. Tufts rates have decreased .3%, while Fallon's came in 9% lower than its current premium.

Rounding out the group of Medicare HMOs is Health New England, which posted a modest increase of 4.7%. Health New England, which is based in Springfield, operates exclusively in Western Massachusetts.

The news for non-Medicare retirees insured in an HMO or other GIC managed care plan is similar to that of Indemnity Plan members. Across the eight managed care plans the increase in monthly premium ranges from 2.2% (Indemnity Community Choice) to a high of 17.1% (Health New England). On average, the increase is approximately 15%.

“As with the Indemnity Plan, there are no real surprises when it comes to managed care plans. The big difference is that the base price for these plans is less than that of the Indemnity Plan, therefore the dollar increase is less dramatic,” continued Duhamel. “We're confident that our members consider more than the price of the insurance when they are choosing a plan. With health coverage you really need to understand what it is you are purchasing.”