At this time, the eleven member commission haS no interest in approving or even considering a suggestion to reduce or eliminate the annual refund of the Medicare Part B refund. Currently, the GIC reimburses 90% of the premium paid for Part B, which has an annual cost of $23 million.

This move, which many members will undoubtedly find as shocking, comes as a result of a projected state budget shortfall for Fiscal Year 2003 of $2 billion. During the current fiscal year ('02) the state has lost nearly $1.5 billion as a result of the recession.

The GIC budget, which funds the health insurance plans for tens of thousands of retirees and survivors, is expected to be cut as a result of the shortfall. Under state law, the agency cannot spend money beyond that which it has available.

Under a similar move in 1992, then Governor Bill Weld legally forced the GIC to impose benefit cuts as a result of budget reductions. This time, the increased copayments easily passed the Commission on a vote of 6-3, with all three labor representatives in opposition.

In order to achieve an estimated cut of $55 million for FY'03, the GIC has raised copayments for prescription drugs, doctors office visits, outpatient surgery, and emergency room visits. In some cases, the increase has more than doubled the current charge.

For instance, under the GIC Indemnity Plan the current copayments for prescription drugs at a retail pharmacy are $5/$15/$25 and $10/$30/$40 for mail order. As of July 1, the copayment structure will be $7/$20/$40 for retail and $14/$40/$70 for mail order.

A visit to the doctor will also cost more. Instead of a $5 copayment under the Indemnity Plan, the cost will now be $15. Emergency room visits will now carry a $50 copayment, if the retiree is not admitted to the hospital or the visit is not deemed a true emergency.

"Over the past three years, retirees have witnessed three substantial increases in their prescription copayments. Many members depend on these drugs to live...drugs they can no longer afford," said Association Legislative Liaison Shawn Duhamel. "This was not an easy vote for the GIC to make, but that does not make it any less Draconian. The state's budget should not be balanced on the backs of retirees."

"This is going to be a real battle, there's no question about it. To even consider cutting the Medicare reimbursement is an outrage," comments Association President Ralph White. "This amount represents $580 to state and teacher (RMT) retirees on Medicare. It would be a significant loss to take that away."

It is expected that the House will file and debate its version of the FY'03 budget in late April, with the Senate acting in May. Association officers will continue to work with Administrative and Legislative leaders to seek alternatives to reducing benefits or increasing costs on our members.