Medicare Plans Not Impacted

JANUARY 2010 VOICE: Facing a $36 million deficit in the current Fiscal Year, the Group Insurance Commission (GIC) voted in November to increase copayments and deductibles on their non-Medicare plans effective February 1, 2010.

GIC officials point to an unexpected sharp increase in health care utilization as the cause of the deficit. For example, visits to the emergency room with flu-related symptoms are up 7% since July 1.

The highly unusual mid-year increase in out-of-pocket costs will cover roughly half, or $18 million of the GIC's deficit. Internal cost saving measurers aim to close the remaining budget gap.

Thankfully, retirees and survivors, insured through Medicare and  one of the GIC's Medicare Extension plans, are not impacted by the increased costs. Medicare enrolled retirees will not see any increase in their insurance costs, at least through the end of the fiscal year in June.

In announcing the deficit to the fifteen-member commission and explaining the root causes behind the shortfall, GIC Director Dolores Mitchell was clear that the increases would not be popular and would place a financial burden on many non-Medicare members. "Make no mistake, this is cost shifting plain and simple. This is not something I'm happy about, but I see no alternative," commented Mitchell.

Unlike past years when deficits have materialized, there will be no supplemental appropriation coming from the Legislature. The Commonwealth's ongoing recession and revenue decline makes additional appropriations all but impossible.

While prescription drug copayments will not increase, most other copayments will see a $5 to $25 dollar increase, depending on the service. The GIC has also instituted an upfront annual deductible of $250 per person or $500 per couple, up to $750 maximum per family (not including prescription drug copayments).

Association officials have worked closely with officials from the Mass Teacher's Association to monitor recent developments at the GIC. MTA Vice President Paul Toner represents teachers on the GIC and works closely with retiree representative Anne Paulsen.

"While we are thankful that Medicare retirees are held harmless from these increases, the Association is opposed to these mid-year increases. Instituting an upfront deductible is setting a dangerous precedent for everyone," said Association President Ralph White. "I understand these are tough economic times and that the GIC can't avoid the deficit. But, we have to be very careful that we are not hurting those who can least afford it."