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Medical Contribution Rates for Retirees
Each year, we struggle to achieve the right balance of benefits and contributions. We expect to spend $251 million for health care in FY08. That buys a lot of valuable health care for 67,000 employees, retirees and dependents, but that expense is rising faster than income in the city’s General Fund.
To keep the plans affordable and secure this year and in future years, participant contributions will increase May 1, 2007. The overall increase is 28 percent.
Contributions for May 2007 were calculated according to these four steps, in order:
- All HMO rates increased 9.5 percent based on the guarantee we negotiated with BCBSTX last year. All PPO rates increased 5.5 percent, based on experience in the plan.
- The current contribution ratio of 77/23 percent was changed to 75 percent city contribution and 25 percent participant contribution.
- Retirees under age 65 will contribute a greater portion than employees and other retirees because claims for that group are higher and growing.
Active employees who cover dependents will pay $20 more per month for dependent coverage.
This contribution calculation has the least effect on active employees — our primary goal. If you have a working spouse, we encourage him/her to enroll in their employer’s health plan, if available.
These calculations will result in a contribution ratio of 74 percent city, 26 percent participant. Here’s what it means to you:
- HMO contributions will increase 30 percent, on average.
- PPO contributions will increase 15 percent, on average.
- Medicare Advantage plan contributions will not increase now.
These changes will help secure these options for future years — preserving the “benefit-for-contribution” equation. Compare the rates on page 8 to the chart on this page. Even with this increase in contributions, you still pay less for health care than your neighbor. Retirees still have access to several options that provide comprehensive coverage - something that is quite valuable these days. Click here for Medicare Advantage plan rates.
Coverage Category |
Nontobacco user |
Tobacco user |
| HMO |
PPO/OOA |
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PPO/OOA |
| Retirees Under 65 Monthly Contributions |
Retiree only |
$136.22 |
$458.02 |
$161.22 |
$483.02 |
Retiree + 1 |
$401.98 |
$1,178.10 |
$426.98 |
$1,203.10 |
Retiree + 2 or more |
$626.86 |
$1,647.88 |
$651.86 |
$1,672.88 |
Retirees over 65 without Medicare |
Retiree only |
$421.38 |
$621.80 |
$446.38 |
$646.80 |
Retiree + Spouse |
$884.90 |
$1,305.74 |
$909.90 |
$1,330.74 |
Retiree + Family |
$1,516.98 |
$1,617.64 |
$1,541.98 |
$1,642.64 |
Retirees over 65 with Medicare |
Retiree w/Medicare |
$131.44 |
$399.60 |
$156.44 |
$424.60 |
Retiree + Spouse
(1 w/Medicare) |
$262.96 |
$1,049.76 |
$287.96 |
$1,074.76 |
Retiree + Spouse
(2 w/Medicare) |
$256.36 |
$440.72 |
$281.36 |
$465.72 |
Retiree + Family
(1 w/Medicare) |
$447.00 |
$1,140.24 |
$472.00 |
$1,165.24 |
Retiree + Family
(2 w/Medicare) |
$407.56 |
$1,047.30 |
$432.56 |
$1,072.30 |
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Disease Prevention Discount Program
Studies show that people who use tobacco are more likely to have higher medical claims and are hospitalized longer. They are also more likely to have smoking as a primary contributor to illnesses like heart, lung and pulmonary diseases that generally require long-term and costly medical intervention.
For these reasons and others, employees, retirees and their covered dependents who do not use tobacco receive a $25 discount each month. If you are paying the disease prevention discount premium and cover a tobacco product user, you could lose medical coverage.
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