MAY 2003 - As the Association and our members fight back Governor Romney’s proposed increase in insurance contribution rates, state insurance officials have announced an overall modest increase in insurance costs for the next fiscal year (’04).

“Unfortunately, insurance costs are going up for most of our members beginning with the June pension check. The increase has nothing to do with the battle over contribution rates and will actually cost the state an extra $70 million next year,” explains Association Insurance Coordinator Cheryl Stillman. “Whether you retired from the state, a city, a town or even the private sector, you most likely will see an increase in your health insurance costs this year.” 

In late March, the state’s Group Insurance Commission (GIC) announced that insurance costs would increase for both the state and retirees beginning on July 1. Unlike last July 1 (when insurance costs increased 17% under the non-Medicare GIC Indemnity Plan and 8% for the OME Medicare Plan), the GIC was able to hold the increase for the Indemnity Plan to single digits and well below the national average.

Across the country, insurance prices are increasing at an average of 14% for the coming year. The GIC has been able to hold the Indemnity Plan to an average increase for the total insurance cost at 8.7% for Medicare and 4.45% for non-Medicare enrollees.

The increased Indemnity Plan cost reflects a 15% increase in prescription drug costs, which is in-line with national averages. GIC officials also extended the contract for the pharmaceutical services for one more year to Express Scripts, despite calls from retirees to rebid the contract.

Once again, the costs of being insured under one of the five HMOs offered through the GIC have significantly increased. Overall increases under the HMOs range from 25.9%, under Fallon Community Health Plan, to 9.7% under Harvard Pilgrim Health Plan.

Detailed information on the new rates (taking effect on July 1) is provided in the columns shown on page 7. The chart shows the total cost of each plan, the retiree’s share (shaded columns) and what the retiree’s cost would be if the plan proposed by Governor Mitt Romney is passed into law.

Members insured through the state’s GIC and who are enrolled in Medicare, have been following developments with the refund of their Part B premium with great interest. The GIC insures active and retired state employees, along with retirees from the former county governments and retired teachers from 74 school districts that opted into the state plan years ago.

Local retirees and other members insured through city, town, county, regional, district or authority insurance plans are not impacted by the elimination of the refund. Each local system governs their health care plans under the general guidelines established by state law.

As our GIC Medicare members know, the Association has been fighting an intense battle to recover and retain the annual refund of the Medicare Part B premium that is withheld from the retiree’s Social Security check. Under state law, Medicare eligible retirees, who are insured through the GIC, must enroll in Medicare Part B.

For the current fiscal year, Medicare retirees will pay $676.20 per person out of their own pockets for Part B coverage. The total cost to reimburse all GIC Medicare retirees is estimated to be $30 million in 2003.

“We have not given up on the fight for the reimbursement, but it is not going be easy,” said Association Legislative Liaison Shawn Duhamel. “With the entire state insurance program under assault from the governor and a $3.2 billion deficit, we are in for a very tough year. Our members are up to the challenge though and we will continue to fight the good fight.”