As members are aware, the monthly premium for Medicare B is deducted directly from the retiree's Social Security check by the federal government. Those members, who qualify for Social Security, but do not receive a benefit due to the Government Pension Offset (GPO), are billed directly by Medicare.

The new Part B premium places the annual financial burden on retirees and survivors at $938.40 for an individual or $1,876.80 per couple. This premium is paid on top of the monthly payment for a retiree's supplemental insurance.

The supplemental premium is deducted directly from the pension benefit. This insurance covers prescription drugs, as well as roughly 20% of the medical bills that Medicare does not cover.

Not surprisingly, Association members are stunned by such a large increase. Association officials are equally upset, as well as concerned that the Medicare premium jump could indicate large insurance increases may be coming at the state and local level.

"We are very concerned. Retirees are already being squeezed by the impact of high fuel prices, property taxes and the existing medical insurance costs. How in the world can retirees be expected to get by if the prices keep going up like this," said a shaken Cheryl Stillman, the Association's insurance coordinator. "I talk to members every day who are having a terrible time as it is."

Association member Paul Anderer, a retired Waltham firefighter, was so incensed by the federal increase that he personally visited our Beacon Hill office. "What they are doing to us is almost criminal. We are stuck in a program (Medicare) that keeps getting more expensive every time you turn around. People try to save money and buy drugs from Canada, but the government tries to block that too. It's good to get a COLA every year to at least try to keep up with these prices," stated Anderer.

As we have previously reported, municipalities that require enrollment in Medicare Part B may opt to reimburse retirees and survivors for a portion of their monthly Medicare premium. This reimbursement is usually paid once a year, typically in late summer.

Until recently, the state itself had reimbursed the retirees and survivors insured under the Group Insurance Commission. This reimbursement had been at either 85% or 90% of the Medicare premium, which was paid each September after the close of the previous fiscal year.

Longtime Association members will recall that in October of 2001, then Acting Governor Jane Swift used her executive powers to cut the reimbursement from the FY02 budget. Swift publicly justified this action by pointing to the $200 million deficit that had surfaced that fall. By the spring of 2002, a $2 billion deficit had emerged within the state budget making it impossible to restore the Part B funding at that time.

Following Swift's lead, Mitt Romney openly opposed reinstating the reimbursement when he took office in January 2003. Not only did he oppose reimbursing retirees for Part B, but Romney also tried to raise retiree health insurance premiums by as much as 300% - a proposal that was soundly defeated by a bipartisan legislature.

"When Jane Swift cut the funding, the downward slide began. From that moment on, I've maintained that Medicare Part B should be considered part of a retiree's health insurance benefit. The state, as well as many cities and towns, collectively save hundreds of millions of dollars by requiring eligible retirees to join Medicare," says Association President Ralph White. "I feel strongly that the government has a moral obligation to pay their fair share of the Part B premium, otherwise the retiree is being taken advantage of.

"The problem we've faced at the state level, in getting the reimbursement money back into the budget, has been the result of the recession. This year it would cost about $32 million to fund the program. We have put a lot of effort into lobbying on this issue, but the money just has not been there."

Association officials point to the recent upturn in the state's economy as a good sign that the funding could be restored in the coming session.

"This is one issue that we are not backing down on," continued White. "We will keep fighting until the Part B refund is restored."