STRS announces preliminary estimates for 2009 health care premiums
From John Curry, May 19, 2008
Subject: Retirees & actives....some disturbing hc premium increase news for STRS retirees projected for 2009...try 10% & 13.6% !!!!!!!!!!!!!
From a report to the OEA-R re. the May STRS Board meeting:
"Regardless, the window of opportunity for HB 315 to work properly is going to close in the near future. It must pass in 2009, and for that to happen there will have to be a change in the majority party in the Ohio House."
"Preliminary Health Care Premium Estimates Presented
Preliminary estimates of 2009 health care premiums for STRS’ self-insured programs were presented. The estimates are based on claims experience for 2005, 2006, and 2007. This data suggests that an average increase in premiums in the neighborhood of 13.6% for non-Medicare enrollees and 10% for Medicare enrollees is likely. Specific increases for different “risk pools” will cause some variance around those average figures. For example, non-Medicare, 30-year Benefit Recipients on the “Basic Plan” are expected to see no increase in monthly premiums, while spouse coverage could be increased by $97 for the same coverage. Exact figures will be presented at the June Board meeting and will also reflect claims experience for the first three months of 2008 as well as industry trends data.
Some key factors in determining 2009 premiums include:
• No plan design changes for 2009;
• Continue the “2004 member premium contribution strategy” in 2009;
• Facilitate understanding of HB 315 among legislators by sustaining current plan design while our legislative initiative is in progress;
• Continue the current benefit structure until program costs require consistent use of principal from the STRS Health Care Stabilization Fund (HCSF) – now projected to occur between 2008 and 2010.
Due to sub-par investment performance in the current fiscal year, STRS expects to have to dip into the principal later this year to pay 2008 health care bills. However, the “consistent use of principal” can be affected by better investment performance and other factors, so it is unclear if this year is the start of the dreaded “death spiral” of the HCSF or just a temporary aberration. Regardless, the window of opportunity for HB 315 to work properly is going to close in the near future. It must pass in 2009, and for that to happen there will have to be a change in the majority party in the Ohio House.
Regarding other ways to cut premiums, STRS Health Care Director, Greg Nickel, said that it is difficult to hold down premiums through cost reductions because it take $5 million dollars in savings to produce just a $1 decrease in monthly health care premiums for STRS members."
Note from John:
Let's see....for a non-medicare aged retiree and his/her spouse a 13.6% increase from the current $850 monthly healthcare premium would add $115.60 for a new 2009 monthly premium of...are you ready for this............... $965.60 per month premium!
Subject: Retirees & actives....some disturbing hc premium increase news for STRS retirees projected for 2009...try 10% & 13.6% !!!!!!!!!!!!!
From a report to the OEA-R re. the May STRS Board meeting:
"Regardless, the window of opportunity for HB 315 to work properly is going to close in the near future. It must pass in 2009, and for that to happen there will have to be a change in the majority party in the Ohio House."
"Preliminary Health Care Premium Estimates Presented
Preliminary estimates of 2009 health care premiums for STRS’ self-insured programs were presented. The estimates are based on claims experience for 2005, 2006, and 2007. This data suggests that an average increase in premiums in the neighborhood of 13.6% for non-Medicare enrollees and 10% for Medicare enrollees is likely. Specific increases for different “risk pools” will cause some variance around those average figures. For example, non-Medicare, 30-year Benefit Recipients on the “Basic Plan” are expected to see no increase in monthly premiums, while spouse coverage could be increased by $97 for the same coverage. Exact figures will be presented at the June Board meeting and will also reflect claims experience for the first three months of 2008 as well as industry trends data.
Some key factors in determining 2009 premiums include:
• No plan design changes for 2009;
• Continue the “2004 member premium contribution strategy” in 2009;
• Facilitate understanding of HB 315 among legislators by sustaining current plan design while our legislative initiative is in progress;
• Continue the current benefit structure until program costs require consistent use of principal from the STRS Health Care Stabilization Fund (HCSF) – now projected to occur between 2008 and 2010.
Due to sub-par investment performance in the current fiscal year, STRS expects to have to dip into the principal later this year to pay 2008 health care bills. However, the “consistent use of principal” can be affected by better investment performance and other factors, so it is unclear if this year is the start of the dreaded “death spiral” of the HCSF or just a temporary aberration. Regardless, the window of opportunity for HB 315 to work properly is going to close in the near future. It must pass in 2009, and for that to happen there will have to be a change in the majority party in the Ohio House.
Regarding other ways to cut premiums, STRS Health Care Director, Greg Nickel, said that it is difficult to hold down premiums through cost reductions because it take $5 million dollars in savings to produce just a $1 decrease in monthly health care premiums for STRS members."
Note from John:
Let's see....for a non-medicare aged retiree and his/her spouse a 13.6% increase from the current $850 monthly healthcare premium would add $115.60 for a new 2009 monthly premium of...are you ready for this............... $965.60 per month premium!
posted by Kathie Bracy at 4:34 PM
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