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Retiree health costs also increase in some areas

• Published June 25, 2009

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Had a reader email in a question about the proposed increases in co-pays, deductibles and other costs for state employee health insurance. What about retirees? Will their premiums go up?

Answer: Yes and no.

For active employees, the individual monthly premium on Uniform Medical Plan will increase from $26 to $41.

For retirees without Medicare coverage, the monthly UMP premium goes from $427 to $440.

For retirees with Medicare, the UMP rate actually drops from $170 to $163 in 2010.

For the record, I judge the changes in out-of-pocket expenses to be more significant than the premium changes. Remember that the premiums overall are locked into that 12 percent share for employees.

So most of the increase in medical costs will be absorbed at point of service. For example, the retired individual Uniform Medical Plan subscriber above pays $13 a month more in premiums, or $156 a year.

The changes in UMP’s structure are potentially much more costly. First you have a $50 increase in the annual deductible for individuals, then you must share 15 percent of costs instead of 10 percent, and the maximum out-of-pocket costs are increased by $500.

For healthy (or at least care-adverse) people, the premium increase will hurt most. But for those with significant health conditions, who are already spending a lot on their care, their exposure is increased more than their premium costs.