Sliding Scale Information for Medicare-Eligible Retirees

PEEHIP rate changes for Medicare-eligible retirees are reflected in checks beginning December 31, 2024, for January premiums. These premium changes are the result of one of the following events: First, there was a significant reduction in the FEDERAL FUNDING for all Medicare Advantage plans across the country. These premium increases were explained in multiple Advisor articles between March and October. Secondly, there was an increase in the STATE funding of the “subsidy” component of the Sliding Scale calculation that must be applied to all PEEHIP members who retired after October 1, 2005. The change to that part of the Sliding Scale formula resulted in premium changes based on service time above or below 25 years. Read about the premium increases in the Advisor articles here and here

Sliding Scale Law Information and Example Premium Adjustments for Medicare-Eligible Retirees

There are increases as well as decreases in the premiums for retirees subject to the sliding scale effective each October coverage month. These changes in the premiums are related to the retiree sliding scale law which uses years of service in the premium calculation. Each year, the cost of the insurance is recalculated based on claims cost and medical trend.

This year, the cost for Medicare retirees went down, and when the cost is reduced, the discount off the base premium for Medicare retirees with more than 25 years of service also reduces from the previous year. The discount varies based on the years of service. This results in a slight premium increase because the discount is less but the premium is still below the base premium amount.

The reverse happens when the years of service are less than 25 since the penalty amount is applied against a lower cost amount. Just like the discount, the penalty varies depending on the years of service. Those Medicare retirees would still have a premium that is greater than the base premium amount.

For examples and a more detailed explanation, please see below:

Sliding Scale Law Information and Example Premium Adjustments for FY2025

Sliding Scale Law Information and Example Premium Adjustments for FY2022

Sliding Scale Law Information and Example Premium Adjustments for FY2021

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