Sliding Scale Information for Medicare-Eligible Retirees
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: