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MAY 1999 - Remain Below National Average - As was expected, the state insurance rates for FY’2000 will increase for the third consecutive year. The state’s Group Insurance Commission (GIC) approved the slight rate hike at their March 5 meeting.

Due to the diligence of the GIC and its indemnity provider UniCare over the past year in controlling costs, the price increase for the Indemnity Plan is less than half the amount of the 1998 increase. Savvy management, along with the elimination of allegedly inflated bills from providers (see story pg. 10) has proven successful at controlling costs.

In fact, members, who are enrolled in the GIC Indemnity Plan, will see a lower increase in their monthly premiums than those of members enrolled in an HMO. Nationally, HMO costs have skyrocketed over the past two years. This year, those rate increases hit home in Massachusetts.

"We feared the increase was going to be much higher. GIC officials deserve credit for keeping costs down in the indemnity plan. However, the true test is to see if they can maintain this over the long run," said Association President Ralph White. "It is not realistic to expect to never see an increase in the premiums. The important thing is to ensure that the increases are manageable."

HMOs Under Fire

Insurance analysts point to the fact that many HMOs undercut their costs in order to lock in a market share for the company in the early to mid-nineties. In some cases, insurers went without making a profit for the past several years, so that they could keep their rates lower than the competition.

"The jump in HMO ratings has been expected for some time now. How long could they continue to low ball their costs, not make a profit, and continue to operate as a viable business," commented Association Legislative Liaison Shawn Duhamel. "All we have heard is how HMOs can keep costs low while still providing excellent medical care. Maybe all that talk was just marketing hype."

In the days leading up to the vote, GIC officials lead by Executive Director Dolores Mitchell, were locked in intense negotiations with several HMOs over their requested rates for FY’2000. In at least one case, the GIC threatened to revoke a contract when the insurer expressed opposition to implementing the GIC’s policy on mental health benefits. All GIC run plans have fully implemented what is known as mental health parity.

June Price Increase

For members enrolled in one of the state run GIC insurance plans, the monthly insurance premium deducted from your pension will increase in your June check. Since insurance premiums are paid a month in advance, members will see a reduction in the amount of their June check.

Rates under the GIC Indemnity Plan with CIC coverage for members retired prior to 7/1/94 will increase each month as follows: individual $1.07 (2.10%), family $2.66 (2.29%), Medicare OME $1.30 (4.15%).

Members who retired after 7/1/94, under the 85/15 rate structure, will see the following increase in the Indemnity Plan: individual $1.61 (2.36%), family $3.96 (2.55%), and Medicare OME $2.27 (5.26%).

Retired teachers who are enrolled in the GIC under the RMT program will see their monthly premium with GIC increase as follows: individual .80 (1.40%), family $1.37 (1.01%), Medicare $1.14 (3.32%).
 
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