Retired state employee D. Grover planned for a future when she’d need to spend more on health care, but not for her monthly insurance costs to more than triple when the calendar flipped from December to January.
Grover, of Cañon City, buys a Medicare Advantage plan through the Colorado Public Employees’ Retirement Association. Earlier this month, she received notice that the cost to maintain her current insurance would rise in 2025 from $71.50 each month to $268.50, a 275% price hike even after a subsidy.
That level of increase is difficult to manage for someone who lives on a fixed income and needs to hire household help because of a health condition, she said.
“I don’t know how long I can stretch it,” Grover said of the money she has saved.
About 71,000 people statewide buy their health insurance through PERACare, and roughly 70% of them face a steep increase in premiums next year.
In 2025, premiums for the three PERACare options will increase to:
- UnitedHealthcare Medicare Advantage plan with lower out-of-pocket costs: $349, from $152 per month this year. With the maximum subsidy, the cost will be $234 per month, up from $37.
- UnitedHealthcare Medicare Advantage plan with higher out-of-pocket costs: $169, from $52 per month this year. With the maximum subsidy, $54, from $0.
- Kaiser Permanente Medicare: $170, or $55 per month this year with the maximum subsidy. Both are unchanged.
The subsidies gradually increase, depending on how long someone worked in state government. They max out after 20 years of service.
When PERA added the two United plans in 2022, they locked in rates for three years, said Patrick von Keyserling, senior director of communications for the organization. Now, that agreement is ending, and the 2025 rates reflect multiple years’ worth of increasing medical costs, he said.
“We’re aware that premium increases are not welcome news for our retirees,” he said in a statement.
Federal changes, including limiting how much Medicare recipients pay for prescription drugs, also contributed to increasing premiums, von Keyserling said. PERA took bids for the plans it would offer to try to keep prices down while minimizing disruption, he said.
For some retirees, buying a Medicare Advantage plan outside PERA may make more sense, though the trade-off for lower premiums tends to be fewer choices of doctors, a shorter list of covered drugs and more out-of-pocket costs, von Keyserling said.
“PERA works hard to keep premiums as low as possible while providing options for quality plans,” he said. “We also encourage our retirees to look at the marketplace and select a plan that is best for them, even if the plan is outside of the PERACare offerings.”
Grover said she made an appointment with a navigator from the State Health Insurance Assistance Program to figure out her options both in and out of PERACare, but none look attractive at the moment. Plans that have cheaper premiums have higher out-of-pocket costs, and she wants to avoid insurance that wouldn’t allow her to continue seeing her current doctors.
“I don’t know what I’m going to do,” she said. “You’re going to pay for it one way or another.”
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