Health care prices for Colorado public-sector retirees see huge increase for 2025

Tens of thousands of public sector retirees received an unwelcome notice this fall when the renewal rates for Medicare Advantage plans through the state’s pension plan hit their inboxes.

Two of the three plans offered will see huge increases for 2025 — one plan’s premium prices are increasing by 130%, while another plan is jumping by more than 200%. A third plan will see no change in premium prices.

“When I talked to them, they said, ‘You might prepare yourself for a little bit of sticker shock,’” said Bill Heicher, a retired district wildlife manager in Eagle. “Well, holy moly.”

Even with a subsidy for his years of service in state government, Heicher’s and his wife’s plans are increasing to a combined $583 per month, a $394 increase. 

The rate changes are the first time in three years that many members of the Colorado Public Employees’ Retirement Association, or PERA, have seen increases in their Health insurance bills. And that also explains the issue, said Andrew Roth, the pension’s executive director and CEO.

In 2021, when PERA added Medicare Advantage plans from UnitedHealthcare to its offerings for 2022, it struck a great deal. Not only did United offer rates that were below 2021 premiums but it locked in those rates for three years.

Now that the deal is up, Roth said PERA’s 2025 rates must “reflect what’s happening in the market overall.”

“Unfortunately, we don’t have a magic wand to lower premiums,” Roth said.

Medicare Advantage plans are essentially beefed-up versions of Medicare coverage that work like more traditional health insurance policies. That means they come with premiums, out-of-pocket expenses, coverage benefits and limitations, and specified medical provider networks.

PERA, like many other public pensions, has offered medical coverage to its beneficiaries for decades. Today, nearly 64,000 people — both public sector retirees and their partners or dependants — are enrolled in a Medicare plan through PERA.

The pension also offers health coverage for retirees who are not yet 65 years old, the age of Medicare eligibility. About 7,000 people are covered through that — and those plans, while costing a lot more than the Medicare plans, are generally not seeing big increases in premium prices.

Roth said PERA tries to offer its members Health insurance plans with “richer” benefits. That means, in an actuarial sense, that there’s more bang for the buck. It’s just next year’s Medicare plans will cost a lot more bucks.

The increases are in two plans from UnitedHealthcare. One of the United plans is jumping to a $349 monthly premium in 2025 from a $152 monthly premium in 2024. The other United plan is rising to $169 per month from $52 per month.

PERA also offers a Medicare Advantage plan through Kaiser Permanente. That plan is holding steady at $170 per month.

Public retirees can receive a subsidy from PERA to help cut the cost of their premiums. The subsidy is $5.75 per month for every year of service — up to a maximum $115.

For reference, unsubsidized premiums for a 40-year-old who buys insurance on their own in Colorado average around $460 per month. 

PERA members could drop the pension’s plans and go with less costly Medicare Advantage plans available in the open market. But those plans may not offer the same level of benefits, or provide access to the same doctors.

Heicher, the retired wildlife manager, said he looked into that — and also into switching to a plan through PERA with less expensive premiums. But, between the added copays and higher deductibles, he said those plans ended up not being any cheaper. Plus, living in a relatively rural area means that the doctors’ networks for some of those plans are not as robust.

So, he’s resigned to paying the higher rates.