Gov. John deJongh Jr. signed insurance renewal contracts as recommended by the board in September, locking in new rates and coverage for the 2013 fiscal year.
The new plan will raise the premium health insurance rates for the 6,873 retirees covered by the program to better reflect their share of coverage, as compared to the 8,301 active government employees who have been paying more of the overall burden over the past years, according to Government House and the GESC.
The new medical and prescription drug plan with Connecticut General Life Insurance Company (CIGNA) will raise premiums for retirees younger than 65 years by more than 42 percent for both individuals and families, and those with covered families above the age of 65 will see a slightly higher increase, according to Government House.
Retirees 65 years and older – who are then eligible for Medicare – will see increases of roughly 64 percent in their premiums.
Active government employees, by contrast, will experience a premium rate increase of 1.6 percent.
The educational sessions, called to help retirees make an informed decision about their health insurance plans before the insurance plan's open enrollment period ends Friday evening, were teleconferenced between the St. Thomas and St. Croix campuses of the University of the Virgin Islands.
At the outset of the forum, Health Insurance Board Chairman John Abramson tried to explain the board's actions, saying health insurance premiums throughout the nation had been increasing faster than inflation for many years.
The board sought bids for the government's health insurance plan and five companies responded, but CIGNA's was the least expensive, he said. Keeping benefits the same, the insurance plan will cost $79.3 million this year – a 15.9 percent increase from last year, he said.
This terrible trend, combined with a V.I. government insurance plan that for years had existing employees partly subsidizing retirees' insurance benefits – and an ever decreasing ratio of active employees to retirees, partly due to recent layoffs – created a situation where changes had to be made to keep the program solvent, Abramson said.
As the ration of active employees fell and retirees consuming more medical care increased, insurance premiums from retirees fell further and further below the cost of the care those same retirees received, requiring an ever greater amount of subsidization from active employees, he said.
Abramson said it needed to be corrected so that each group in the plan – active employees, and retirees under age 65 and over 65 and eligible for Medicare – “is carrying its own weight in the plan."
No one wanted increases in premiums or decreases in services, but there were few options, he said.
"I want to be crystal clear to you that there will be no easy solutions and there were no easy solutions before us. The question came down to: ‘Do we want to sacrifice anything?’” Abramson said.
“We didn't want to sacrifice anything so it came down to the increased cost."
Some asked highly specific questions about insurance plan payments and policies, or what procedures they needed to follow, with Acting Chief of Group Health Insurance Rochelle Benjamin and V.I. Division of Personnel Director Kenneth Hermon providing detailed, number and date filled answers.
"I will turn 65 in February and therefore I'm not eligible for Medicare until that time," said St Croix resident William Tobias, asking how he could get his premium reduced later when Medicare kicked in, if he signed up now during the open enrollment period, and could not change his plan until the next open enrollment.
"Once you turn 65, bring in a copy of your Medicare card and the month after your 65th birthday, your premiums will be reduced," Benjamin said.
Many others voiced anger at the board for not finding some way out of the increases.
"We feel the increases are not only unfair but also illegal," said St. Croix talk radio host Abdul Ali, reading a statement from a group of government retirees. "And we will undertake a full scale investigation and consider legal action," Ali continued. “This action clearly gives the impression there is a lack of respect for retirees and workers.”
"We retirees are living on a reduced, declining income, what with WAPA (Water and Power Authority) going up, food prices, the price of gas increasing," said Carmen George of St. Thomas. She said the new plan appeared to call for premiums of almost $400 a month for retirees like herself.
"For those maybe not as fortunate as me who receive a bimonthly check less than $500, they will now be forced to drop health insurance because they can't afford it and also afford to feed themselves or pay their bills. What is going to happen to those people?" George asked.
Benjamin agreed the increases are steep, but necessary to keep the plan solvent, she said, suggesting the increases in individual retiree's monthly contributions were not as large as George feared from the gross numbers.
"The monthly cost is approximately $390 per month, but that is the overall cost, not what you would be paying out of pocket," Benjamin said. The retiree would pay 35 percent, while the government would pay 65 percent, she said.
St. Thomas and St. Croix each had 60-70 residents attending the teleconferenced forum, few of whom appeared happy with the answers they were getting.