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Retiree health care premiums
Old 10-23-2014, 12:14 PM   #1
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Retiree health care premiums

Just thought I would post that my retiree health care premium stayed flat this year (from an unnamed Megacorp). This is consistent with other reports, and with the Medicare results, and in comparison with the premiums doubling since 2006. (The megacorp limits its contributions to a 4% per annum increase)
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Old 10-28-2014, 01:58 PM   #2
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My former employer is self-insured through BCBS, and my retiree health care premium over the past 7 years went up very little each year, stayed flat, or went down ever so slightly. However, the premium for 2014 actually dropped 13% over last year's rate!
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Old 10-28-2014, 02:01 PM   #3
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I was notified a couple of weeks ago that my retiree health insurance will increase $20.00 a month beginning Jan. 2015 from $248.00 a month to $268.00.
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Old 10-28-2014, 02:05 PM   #4
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My Federal BCBS family plan will increase from 309 a month to 321. My 1.7% COLA will cover the increase.

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Old 10-28-2014, 03:58 PM   #5
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Just got a letter from my former Megacorp employer that, effective April 2015, they would switch from a company run Medicare Supplement Plan to a plan where Megacorp will fund the purchase of a Medicare Supplement plan from a private health care exchange. Although I'm still a few years away from being Medicare eligible, I can't imagine that this is going to be a positive change for retirees. This is being done under the guise of being "competitive" meaning they're cutting back because everyone else is cutting back.


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Old 10-28-2014, 05:06 PM   #6
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My retiree health care plan plan premium from public employee job at city of Chicago for me and my wife went from 750 in 2013, to 1051 in 2014, and to now just announced 1375 in 2015. We then get dumped in Obamacare in 2017. The vast majority of public employees do not get the fat pensions and fabolous benefits the misinformed general public think we get.
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Old 10-28-2014, 05:08 PM   #7
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I've heard that my retiree HI will not go up next year.
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Old 10-28-2014, 05:46 PM   #8
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Just got a letter from my former Megacorp employer that, effective April 2015, they would switch from a company run Medicare Supplement Plan to a plan where Megacorp will fund the purchase of a Medicare Supplement plan from a private health care exchange. Although I'm still a few years away from being Medicare eligible, I can't imagine that this is going to be a positive change for retirees. This is being done under the guise of being "competitive" meaning they're cutting back because everyone else is cutting back.


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This will doubtless save them a bundle in administrative costs alone.

Take a look at the various Medicare supplemental programs, we changed to Kaiser Medicare Advantage + from our Fed insurance because (in the NW) it has excellent dental and hearing aid coverage.
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Old 10-28-2014, 05:48 PM   #9
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I just got notice that my family retiree healthcare is increasing from $1,668 per month to $2,838 per month. Looks like I need another option
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Old 10-28-2014, 06:01 PM   #10
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I just got notice that my family retiree healthcare is increasing from $1,668 per month to $2,838 per month. Looks like I need another option
A health insurance plan that costs $34,000 per year??
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Old 10-28-2014, 06:31 PM   #11
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We just got this information from DH's former employer.

We are in a subsidized retiree plan where the company will absorb increases of up to 5%.

We are on a high-deductible plan for me and kids. (DH is on Medicare). The history of the cost of this plan over the past 4 years:

2012 - $180 a month
2013 - $479 a month
2014 - $780 a month
2014 - $842 a month

There were big increases from 2012 to 2013. There was another large increase from 2013 to 2014. That year Megacorp switched insurers to manage the program (it is self-funded). The hope I had was that switching carriers might help the increases. It might seem from the above that it did...but not really.

The letter from Megacorp says that our increase based upon claims experience would have dictated a 42% increase for 2015! However, Megacorp decided to increase premiums 8% instead (which is similar to that active employees will be paying).

I must admit I had to wonder why such a huge increase given the big increases the last 2 years and looking at reports here and elsewhere of premiums not being increased all that much.

After thinking about it, I wonder if it is due to small size of the retiree pool.

Megacorp has 3 groups of employees: Those who receive subsidized retiree coverage, those who receive unsubsized retiree coverage and those who receive no retiree coverage.

As time goes on, there are fewer and fewer people in groups 1 and 2. As they go onto Medicare and there dependents either go on Medicare (spouses) or grow up and get their own coverage (children), the retirees eligible for retiree coverage gets to be a smaller and smaller group.

Also, it is hard to imagine anyone paying for the unsubsidized retiree coverage. The unsubsidized cost for 2015 would be $1341 a month for a retiree and children. That is probably pretty comparable to ACA exchange costs -- if not more -- and there is a chance there of a subsidy (if eligible).

So, I imagine for a lot of people the unsubsidized coverage is no longer attractive. For just a retiree (no spouse) the unsubsidized cost is $745 a month.

So - as time goes on - I think the people with unsubsidized coverage are going elsewhere. And, all employees with retiree coverage are getting to be a smaller group due to people aging out of coverage. So, any large claims will have a huge impact on premiums given the small size of the group.

Megacorp said that they realized that the cost increases are not sustainable and they are looking into what to do about it. In the letter, they say are going to look into private exchanges so as to have a larger insured pool. So, that suggests to me that my explanation for the huge increases is probably correct -- small size of shrinking pool.
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Old 10-28-2014, 11:14 PM   #12
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................After thinking about it, I wonder if it is due to small size of the retiree pool.

Megacorp has 3 groups of employees: Those who receive subsidized retiree coverage, those who receive unsubsized retiree coverage and those who receive no retiree coverage.

As time goes on, there are fewer and fewer people in groups 1 and 2. As they go onto Medicare and there dependents either go on Medicare (spouses) or grow up and get their own coverage (children), the retirees eligible for retiree coverage gets to be a smaller and smaller group.

Also, it is hard to imagine anyone paying for the unsubsidized retiree coverage. The unsubsidized cost for 2015 would be $1341 a month for a retiree and children. That is probably pretty comparable to ACA exchange costs -- if not more -- and there is a chance there of a subsidy (if eligible).

So, I imagine for a lot of people the unsubsidized coverage is no longer attractive. For just a retiree (no spouse) the unsubsidized cost is $745 a month.

So - as time goes on - I think the people with unsubsidized coverage are going elsewhere. And, all employees with retiree coverage are getting to be a smaller group due to people aging out of coverage. So, any large claims will have a huge impact on premiums given the small size of the group.
...........
I experienced something similar with private medical insurance. Back near the beginning of the Early-ER experiment, I got on a private group plan, and had the kids on it too. At first it was reasonable, as reasonable as private gets. But as time went by, the increases were coming faster and faster, and larger and larger. I started to realize that it was in a death spiral. The ducks in the pond that could fly to somewhere else were doing so, and the sick ones remained, paying ever-higher premiums in the group pond. They cannot raise the rates on an individual duck, but they can raise them on all the ducks in the group pond. I called this situation "the dead duck pool". This duck had to fly along with the large ducklings.
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Old 10-29-2014, 07:22 AM   #13
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Boy I feel so lucky. When I was preparing for retirement, I based our HI budget included in our living expenses based on the COBRA cost for my existing HDHI, which was $900/month and a bit higher than private insurance policies available for 2011.

When I started exploring more to actually buy HI once I ERed, I found that I could set up a business and become a member of the chamber of commerce and buy a small group HDHI policy for 2012 for $556 a month. The premium went up to $662/month for 2013.

For the first half of 2014, we had a similar HDHI policy through our state exchange that cost $682/month. Effective July 1, we converted to a catastrophic HI policy that costs us $427/month and were recently notified that the cost of that policy in 2015 will be $456/month.

So bottom line, our premiums have been much lower than I expected when we ERed. Though I concede that the coverage we have with the cat policy is somewhat weaker than the HDHI policy we had when I was working, we are both in good health with no chronic conditions and have had modest claims (none so far this year) so the principal reasons for having health insurance are to gain access to negotiated rates with medical providers and insure ourselves from any catastrophic health events.

All amounts are for a couple in their mid to late 50s. YMMV.
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Old 10-29-2014, 08:48 AM   #14
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For those reporting policy price tag staying the same or lower, did your copays for Dr/ER/Hospitals and RXs and deductibles also stay the same?
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Old 10-29-2014, 08:57 AM   #15
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For the first time, our rates went down, by $13 a month.

Still no picnic at $550 per month for me alone, high deductible, under 65.
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Old 10-29-2014, 09:20 AM   #16
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My fed retiree health insurance premiums are increasing from $327 monthly to $337 monthly starting in January, 2015. Deductibles will remain at $300/person or $600/family (wife, myself & 23 yr old son).
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Old 10-29-2014, 09:48 AM   #17
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Medical premium went up 15%, vision and dental unchanged for a total of $314 a month for two people. Coverage, deductible, and max-out-of pocket did not change.
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Old 10-29-2014, 09:59 AM   #18
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For those reporting policy price tag staying the same or lower, did your copays for Dr/ER/Hospitals and RXs and deductibles also stay the same?
Ours have crept up a bit but during the whole time (last few years of employment to now). We have been HDHI all years. Deductibles were $5,950 in 2012-2013, $6,250 in 2013 and 1H2014 and $6,350 for our current cat plan and $6,400 for 2015 cat plan. I don't recall what the deductible was when I was working but it was close to the $5,950 we had in 2012-2013.
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Old 10-29-2014, 11:44 AM   #19
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When I started exploring more to actually buy HI once I ERed, I found that I could set up a business and become a member of the chamber of commerce and buy a small group HDHI policy for 2012 for $556 a month. The premium went up to $662/month for 2013.
Buying health insurance through "professional associations" was very popular in Texas but it was outlawed. It forced people into being individually rated for health insurance policies. It was all done as a result of lobbying by the insurance industry where they were claiming sick people were joining the associations just to be able to get insurace. Texas lost this option but got a "high risk" option for people to get health insurance.

Your state obviously didn't do away with association based policies.
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Old 10-29-2014, 11:47 AM   #20
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If I stayed employed next year I could get insurance for me and DW for $57/month. When I go on COBRA, I'll be paying around $950/mo. It's a HDHP with a $3,000 deductible. It's a slightly lower premium than a bronze plan with half the deductible.
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