Impact on public service workers due to proposed cuts to PEBP in Executive Budget

1. Increase out of pocket costs equivalent to 4 % to 6% of pay for most state workers.

   1. Annual increase in out of pocket costs for an individual active worker: > $1975

      1. Increase premium by $125 per month ($1500 per year-estimate ONLY)

      2. Increase annual effective deductible by $475*

      3. Unspecified increases in co-pays

2. Annual increase in out of pocket expenses for insured family of active worker: > $2950

   1. Increase premium by $166.66 per month ($2000 per year- estimate ONLY)

   2. Increase annual effective deductible for families by $950 *

   3. Unspecified increases in co-pays

2. Eliminate all state subsidy of retirement health insurance for employees who retire after 1 July 2009.

3. Eliminate subsidy for all “Medicare eligible” current retirees.

4. Reduce subsidies for non-Medicare current retirees by 50% over the next two years.

   1. Annual increase in out of pocket costs for individual retiree: > $2775 *

      1. $211 increase in premium (estimate ONLY)

      2. $475 increase in effective deductible*

      3. Unspecified increase in co-pays

2. Annual increase in out of pocket costs for family of retiree: > $5750 *

   1. $404 increase in premium (estimate ONLY)

   2. $950 increase in effective deductible*

   3. Unspecified increase in co-pays

The Governor’s cuts are in addition to those proposed by the PEBP Board:*

1. Increase deductible by $475 for individual (from $250 to $725) and by $950 for families (from $500 to $1450).*

2. Elimination of partial retirement subsidy for those who work more than five but fewer than fifteen years (superceded by Governor’s proposal to eliminate these subsidies for all state workers, regardless of length of service).

3. Index for medical inflation (estimated 10%) the co-payment for for office visits.*

4. Elimination of ADD/ADHD treatment.

* These items are based on PEBP Board’s most recent budget proposal of December 2008, which anticipated a cost savings requested by the Governor of $50m per year. The Executive Budget proposed in January 2009 reduces PEBP’s state support by another $90 million per year. Amounts of deductibles, premiums, and co-pays will be revised by the PEBP Board depending on the final outcome of the legislature’s budget.