Medicare retirees get help as costs increase

The Public Employee Benefits Program will increase rates 12.2 percent for state workers in the plan year beginning July 1.

But that will be partially offset by the premium holiday approved by the benefits board earlier this month. To reduce excess reserves as mandated by the federal government, no workers or retirees insured by the plan will pay premiums in July.

For state employees insuring only themselves, the increase will raise the amount taken out of their paychecks each month $2.63 to $23.44 beginning in August. For those insuring themselves and a spouse the cost will rise from $177.84 to $200.37 - an increase of $22.53.

Those figures are for the low deductible self-funded PPO plan. Workers choosing the high-deductible plan will pay nothing since the state covers their benefit costs while those insuring a spouse as well as themselves under high-deductible limits will pay $95.98 - about $10 a month more than their current premium rate.

Executive Director Woody Thorne said the program was able to leverage some federal money this year to offset the Medicare premium retirees must pay. Medicare eligible retirees have complained repeatedly they should get a lower rate from PEBP since the federal plan is their primary provider and the state plan only covers what's left to pay.

Thorne said Medicare repays states 28 percent of the cost of providing prescription drug coverage to Medicare eligible retirees to encourage the state not to drop that coverage and move retirees to Medicare Part D. He said that will net the program about $3.3 million this coming year. Spread over the eligible retirees covered by the state plan, he said that works out to $52 a month. Thorne said that will leave retirees covering only themselves to pay $59.50 a month for Medicare.

He said the subsidy for retirees covering themselves and a spouse will be $52 apiece or $104 a month, leaving them a total premium of $261.67 monthly. Thorne said that is more than $100 a month less than the $377 the retiree-spouse category paid each month this plan year.

He cautioned plan members, however, that the $52 subsidy can only continue as long as the federal government provides the repayment for drug coverage.

Those amounts are for the average state retiree who would have between 16 and 17 years of service. Thorne said the subsidy increases for those with more years service before retirement. Those with 20 or more years service - which includes the majority of retirees - would get up to $126 a month added to their subsidy which basically covers the high-deductible premium for retirees alone and retirees with children. It would cut the premium in half for the retiree with spouse category to about $135 a month.

The board also approved rate increases for non-state workers covered by the plan - many of whom are retired teachers from districts which provide no retiree benefits. Their rates will increase 9.9 percent.

They, like state workers and retirees, will enjoy a premium holiday in July that offsets the increase and will receive the minimum $52 monthly subsidy to reduce the impact of their Medicare premium.

Non-state retirees also received substantial subsidies for their years of service ranging from $84 a month for five years to $463 for 20 years and over. For those who retired before January 1994, however, the subsidy is limited to $337 a month.

The subsidy in each individual case would be deducted from the $462.89 premium for a single non-state retiree or $811.94 premium for a non-state retiree with spouse.

All the above rates are for those covered by the PEBP self-funded PPO plan used by the majority of state workers. Rates for the northern and southern HMO plans are different.

Thorne said there were no changes to the benefits provided by the plan this year.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.

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Call PEBP at 684-7000

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www.pebp.state.nv.us/plans/

rates.htm and click on Rate Tables