Mass Retirees Fights Rising Insurance Costs

Budget Amendment Caps Payments

APRIL 14, 2017: Together with an AFL-CIO backed coalition of public employee unions, Mass Retirees has sponsored an amendment to the FY18 House budget proposal that lowers the cap on out-of-pocket health insurance costs.

The amendment, #1169 filed by Rep. Paul Mark (D-Peru) with 33 cosponsors, seeks to lower the annual cap on copayments and deductibles to $2,500 per person or $5,000 per family. Under the state’s Group Insurance Commission the current cap is $5,000 per person or $10,000 per family.

Acting in direct response to $280 million in increased copayments and deductibles from the GIC since 2015, the amendment would protect retirees and employees at both the state and local level from runaway healthcare costs.

According to the latest GIC report on Out-of-Pockets costs, published in June 2016 for FY15, the average per-person annual expense is $980. It should be noted that this report does not reflect the sharp increase in copayments and deductibles approved for FY16 and FY18. The GIC is expected to release its annual OPC Report covering FY16 in June.

“Given that the GIC increased OPC costs by some $160 million in FY16, we anticipate the new report will reflect the direct impact on retirees and employees by way of higher average costs,” says Association Legislative Director Shawn Duhamel. “We know the costs can be sky-high for anyone with chronic health problems, requiring frequent doctor visits or high prescription drug usage.

“This amendment is really aimed at protecting the most vulnerable members. No one should be forced to face financial hardship because they or a family member is sick.”

The proposal also has a funding source to cover anticipated costs – the annual Retiree Drug Subsidy (RDS), which is a reimbursement received from the federal government for a portion of Medicare enrollees’ prescription drug costs. The Commonwealth, as well as most municipalities receive RDS payments.

At the state level, the GIC is reimbursed in excess of $30 million a year through the federal RDS program, which is scheduled to continue through December 2018.

The House of Representatives is now scheduled to begin debate on the FY 18 budget on Monday, April 24th.

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