Health insurance and benefits for public retirees, both at the GIC and the local level remain a focus of the Association. Here’s important news from two major healthcare insurers, the state’s Group Insurance Commission (GIC) and Blue Cross Blue Shield of Massachusetts (BCBS), the leading municipal insurer.
GIC FY25 MEDICAL & DENTAL ENROLLMENT
GIC FY25 MEDICAL & DENTAL ENROLLMENTThe GIC presented their annual enrollment and out of pocket data at the May and June commission meetings.
At the June meeting the commissioners received the annual enrollment report following the open enrollment period that occurred in April and May. For the Fiscal Year 2025 plan year, the GIC is insuring 418,659 members, the majority of which are state active employees and retirees (302,482). The remainder of the members are municipal retirees and active employees (116,177) – almost 28% of total enrollment.
As part of the presentation an annual enrollment change report is presented. The report consists of newly insured and transfers into a plan as well as those who have terminated coverage or transferred out of the plan. This gives a gain or loss figure for the plan.
There is a normal transition between the plans at open enrollment and this year was no different. On the Medicare side, Harvard, Health New England and Wellpoint plans all saw a gain in members. The Tufts Medicare Preferred Advantage plan did see a loss during this open enrollment period. The plan does have a limited network which could be the reason for the loss.
The non-Medicare plans are traditionally where we see the majority of transition between plans. Of note is that all three of the Wellpoint plans saw the majority of the increase, along with the MassGeneral Brigham plan, during this open enrollment.
GIC REPORT ON OUT-OF-POCKETS
The 17-member Commission received a detailed report on the out-of-pocket (OOP) costs and trends at its May monthly meeting. One area of focus was a report that detailed cost trends for the past five years (2019-2023). OOP essentially refers to copayments and deductibles, which have been held stable in recent years.
According to the report, over the five-year period the total OOP increase per member is below $3 per month. This increase most directly involves non-Medicare eligible retirees and active employees who must pay the GIC’s $500 annual deductible. While copayments have not increased and the amount of the deductible has remained unchanged, the rising cost of healthcare has resulted in greater use of the enrollees’ annual deductible.
Unlike copayments, which are a fixed amount that an enrollee must pay when accessing healthcare, deductibles represent the amount of money an enrollee must pay outofpocket prior to their insurance plan covering the claim. This concept works the same as deductibles on automobile and homeowners’ insurance.
The GIC acknowledged that while OOP costs have remained stable, monthly insurance premiums have continued to rise year-over-year. As we have been reporting, the average monthly premium for a non-Medicare insurance plan offered by the GIC increased 9.5% for FY25. The Medicare plans have fared better, with an average increase of 4.5%.
These rate increases are in line with what is being reported across municipal government as well. While the Commonwealth and the municipalities cover most premium costs, any increase in the monthly price places increased financial pressure on retirees.
BCBS SURVEY ON CONSUMER CONCERNS: FINDINGS ALARMING
In other health care related news, a recent survey commissioned by BCBS (Blue Cross and Blue Shield of Massachusetts) illustrates consumer concerns over rising healthcare costs. While nearly two-thirds of those surveyed indicate that healthcare costs are a major concern, a stunning 4-out-of-10 respondents reported that they have chosen not to access medical care due to cost concerns. Given the sharp rise in the cost of healthcare, it comes as no surprise that the survey released shows that three-quarters of respondents view insurance costs as a major problem.
Even more alarming is the fact that nearly 40 percent of respondents said they delayed seeking care because of the expense. Think about that – 4 out of 10 people have chosen not to seek medical care due to the cost. Undoubtedly, public retirees were amongst that group. We should all find that entirely unacceptable!
The survey results are not surprising, given the sharp increase in healthcare costs over the past two years. Association CEO Shawn Duhamel offered the following,” Public and private sector retirees alike, along with active workers and their employers, are feeling the financial squeeze of higher healthcare costs. The fact that Blue Cross, led by President and CEO Sarah Iselin, has taken the initiative to bring needed public attention to these complex problems gives us hope.”
MASS RETIREES PREPARING FOR FUTURE FIGHTS
And, Blue Cross is not alone in seeking viable solutions to healthcare cost containment.
At its February rate setting meeting, the 17-member GIC Commission was clear in instructing the GIC to develop a cost containment strategy, while being mindful of the impact of such decisions on enrollees. It is also worth noting that for the past decade, Massachusetts has heavily focused on healthcare cost containment through the work of the Health Policy Commission (HPC) and the Center of Health Information and Analysis (CHIA). While these steps have worked to somewhat contain cost growth over the past decade, the sudden spike in medical inflation is a clear indication that more work needs to be done.
Duhamel continues, “We can foresee the mounting pressure that is almost certain to develop to curtail state and municipal budget increases relative to retiree and employee healthcare. It was not that long ago that fights over retiree health insurance happened on a routine basis, whether over the issue of cost shifting or surrounding the various healthcare ‘reform’ initiatives we encountered in the early 2000s.
“Having been part of those past fights we know what is coming and what to expect. That is why our Association is taking an aggressive and proactive approach to defending your right to accessible, affordable, and high-quality healthcare.”
In the coming months you will see us focus heavily on these issues. And wherever the interests of our members align, we will work closely will the GIC, BCBSMA, Wellpoint, and others to do our part in reigning in the growth of healthcare costs. In the long term, retirees cannot continue to absorb near double digit premium increases any more than the state or municipal governments can.
Given the critical importance of healthcare to our members, we will continue to work to ensure public retirees have a strong voice in these ongoing discussions.