GIC Rates Again Beat Trends

3.5% Increase Below State National Averages

MAY 2013 VOICE: Once again the state’s Group Insurance Commission (GIC) has been able to hold the line on insurance premium rate increases, beating both the state and national averages for an average increase of 3.5% across its offering of health plans.

The Commission sets the annual insurance prices for the healthcare plans offered through the state-run GIC, which now insures over 400,000 retirees, employees and their families. Retirees from 36 municipalities and retired teachers from 62 school districts are now covered under the GIC. Rates for municipal or county retirees, who receive their health insurance coverage locally, are set by the city or town from which a member retires.

While the average increase across all GIC offered plans is 3.5%, actual rates vary by insurance plan. Some retirees and survivors will see less of an increase over current rates. All rate changes take effect on July 1, 2013, but will be included in the June pension withholdings.

With over 58,000 enrollees, the UniCare State Indemnity Plan Optional Medicare Extension (OME) is the most popular insurance plan with Medicare enrolled retirees. For FY14, the OME plan will increase just 2.1%.

The UniCare State Indemnity Plan Basic is also a highly popular plan with those non-Medicare retirees and active employees who want the freedom of choice found in a more traditional insurance plan. Rates for Indemnity Plan Basic will increase 3.1%.

GIC and UniCare officials cite a moderate uptick in utilization and medical cost trend as the reason for the slight increase in rates for both plans. Medical cost trend refers to overall prices charged by medical providers for services provided to patients.

For the 6,411 Retired Municipal Teachers (RMT) enrolled in the OME Plan, rates will increase 8.2% on average. By law, RMTs are enrolled in a separate insurance pool from state retirees, active employees and those municipalities that have recently enrolled in the GIC. RMT rates for the non-Medicare Indemnity Plan Basic will increase a whopping 11.6%.

“RMTs are at a disadvantage when it comes to the rates in that there are only a fixed number of retirees in Pool 2. With no active employees and younger workers in the pool to help stabilize rates, it tends to run slightly more expensive than Pool 1,” explains the Association’s Shawn Duhamel. “Since insurance rates are almost entirely based on utilization and medical cost trend, having a diverse group of retirees and active employees in Pool 1 has helped to stabilize the rates.”

Copays & Deductibles Hold Steady

Members will be pleased that there will be no changes in across -the-board copayments and deductibles for FY14. The GIC is on the record stating that current out-of-pocket-costs (OPC) are in line with other comparable plans and should not be increased at this time.

This means that members can expect to pay the same prescription drug and doctor visit copayments that they’ve had to make since 2010. There is also no increase in the $250 non-Medicare annual deductible ($500 couple or $750 per family).

However, members should pay close attention to copayment rates assigned to individual doctors, hospitals and other medical providers as tiered listings are subject to change.

Some retirees will also be pleased to learn that the GIC has approved a universal health club/gym reimbursement across all of its Medicare and non-Medicare plans. For the first time, those retirees, insured under the OME Plan or Indemnity Plan Basic, will be eligible for up to $100 per year per family in health club dues reimbursement.
In addition, the Affordable Care Act (ObamaCare) requires that women’s preventive healthcare be offered without out-of-pocket costs.

“As expected, out-of-pocket costs are holding steady again this year. The last major increase that we witnessed in the GIC’s copays or deductibles, was in 2010,” said Association Insurance Coordinator Cheryl Stillman. “Right now, the GIC’s plans are pretty comparable with what is being offered by private employers in terms of active employees. However, when it comes to retirees, most private employers have eliminated retiree insurance coverage all together – a despicable practice.”