While the rate increases under the plans of choice for most retirees, the GIC Indemnity and OME plans, are less than Association officials feared, the hit will still be difficult for many members to swallow.

Approved by the eleven-member GIC at its March 10 meeting, the FY05 rate increase marks the third consecutive year in which health care costs have risen. In addition, GIC officials have also increased copayments and deductibles over the past few years. Combined with increased managed care measures, which restrict access to some services, retirees are feeling the pinch.

"Members are still upset that the Medicare Part B reimbursement was eliminated. That alone increased a retiree's out-of-pocket costs by over $700 a year," said Association Insurance Coordinator Cheryl Stillman. "With many of our members living on fixed incomes, even the most modest increase in monthly premium creates a problem."

For members who retired prior to July 1, 1994 and are contributing 10% toward their insurance premiums, the amounts paid as of July 1, 2004 under the GIC Indemnity plan are as follows (all rates include Catastrophic Injury Coverage: CIC): Individual $69.75 (+7.6%); Family $159.32 (+7.7%); OME $36.59 (+5.2%).

Retirees and survivors who retired after July 1, 1994 and are contributing 15% toward their insurance premiums will be paying the following monthly amounts: Individual $100.79 (+7.6%); Family $229.87 (+7.7%); OME $53.35 (+5.1%).

Beyond the increase in monthly premiums, retirees should expect no changes in copayments or deductibles associated with the Indemnity or OME plans. Also, no major benefit changes are planned at this time. As always, we encourage members to read the health plan materials that are mailed to them and attend one of the many health fairs held throughout the state.

In light of the continued complaints the Association receives regarding ExpressScripts, members will undoubtedly be disappointed to learn that the GIC has extended its contract with ExpressScripts for another year.

Originally hired in 1999 to replace MerkMedco as the GIC's pharmaceutical benefits manager, FY05 will mark the fifth and final year of the current contract period. When first hired, ExpressScripts was granted a three-year contract with the option for two one-year extensions.

Since this year marks the second contract extension that the GIC has granted, it must be re-bid for the coming year. State law prohibits the contract from being extended beyond FY05.

While Association leaders are displeased that the contract was not re-bid for the upcoming fiscal year, GIC officials defend their actions and claim that they are pleased with ExpressScripts performance. In addition, the GIC points to the ongoing study aimed at creating a bulk-purchasing group for prescription drugs bought by the state.

Romney Administration officials are currently conducting a study, as ordered by state law, in which the question of a bulk-purchasing plan is being closely examined. If bulk-purchasing were to move forward, the GIC would join Medicaid, Public Health and Department of Correction to create one source for all prescription drug purchases.

"Right now it is unclear as to what will happen with bulk-purchasing. It is something we are watching closely and are looking forward to the study being completed," explained Association Legislative Liaison Shawn Duhamel. "Either way the prescription drug contract will be re-bid next year."