Retirement insights from a Colorado PERA perspective

Legislation & Governance

State Health Care Proposal Could Bring Low-Cost Options

Prescription drug prices
Photo credit: StockByte-78056376-Thinkstock

Two separate announcements from Governor Jared Polis in
October provide early, but promising, signs that Coloradans will soon see new health
care options, including plans with lower price tags.

On October 7, the Colorado Division of Insurance and
Department of Health Care Policy & Financing issued a draft report
proposing a new State
for Colorado residents who purchase their own individual health insurance.

The State Option, which would become available in 2022 under the plan, would be sold and administered by health insurance companies but designed by the state. This State Option would not be available through group plans, such as those provided by an employer or with PERACare, but Coloradans would have the opportunity to enroll in the State Option plans directly. It is designed to be a more affordable option for health coverage, which in turn could control costs, even for those with different insurance.

The State Option would limit the amount paid to hospitals to
between 175 and 225 percent of what Medicare pays, though rural and critical
access hospitals would receive special protections. Currently, Colorado
hospitals charge an average of 289 percent of what Medicare pays, which is
higher than most other states.

Additionally, the State Option would require prescription
drug rebates from manufacturers to be used to reduce the price of individual
policies, something that PERA already has in place for its comparable plans. Insurance
companies would also be required to direct 85 percent of premiums to pay for
patient care. Those insurance companies would bear the risk for patient health
expenses, just as they do today. The state or taxpayers would bear no financial

A public insurance option for Colorado was one part of the
health insurance legislation state lawmakers passed in 2019. Another was the
creation of a state reinsurance program to help insurers cover their sickest,
most expensive patients. On October 10, Governor Polis announced that
individual health insurance premiums for 2020 will go down by an average of
20.2 percent across the state, due in large part to the reinsurance program. Some
communities on the Eastern Plains and Western Slope will see savings of close
to 30 percent
for individuals purchasing these plans.

Potential Impacts for
PERA Members and Retirees

While these developments only apply to the individual health
insurance market and not to group plans such as PERACare, PERA staff are
watching closely for signs of potential cost savings that could impact members
and retirees.

According to the Division
of Insurance
, the reason health insurance is so expensive is that health
care itself is expensive. “But lowering rates for people with individual
insurance plans also helps bring down rates for everyone,” Governor
Polis has argued

One hope is that cheaper premiums will encourage more of the
6.5 percent
of Coloradans without insurance to sign up, reducing the amount
of uninsured care that hospitals and other providers then pass on to people who
do have insurance. The State Option could also publish
the prices that it pays
to hospitals, increasing transparency and creating
even more pressure to hold down prices for everyone.

Colorado PERA, in its work with other employers and
providers of group health insurance through
the Colorado Business Group on Health
, is looking closely at how hospitals
and providers are paid compared to Medicare payments, similar to one of the key
strategies of the State Option from the Polis administration. PERA staff are
closely following its progress and considering how Pre-Medicare PERACare
enrollees might benefit in the future.

The state agencies that developed the State Option proposal
are accepting
written comments
on the plan until October 25.

Information on 2020 Open Enrollment for PERACare, which runs
from October 1 to November 7, is available for both Pre-Medicare
and Medicare


  1. By 2020, it’ll be to late for those of us in the “gap”. Yes, I did plan ahead for retirement, but the rising costs of healthcare are going to bankrupt this country. My family is all facing the same challenges working or retired.

  2. MK says:

    I am very saddened by the lack of real effort on the part of PERA to negotiate fair, reasonable health care for the pre-Medicare retirees. I was very well planned for my retirement. I had a great deal of confidence in my Pension plan (PERA). I was saddened to see PERA roll over and sabotage the retirees in 2010 and then again. The treatment I received as a member before retirement was very different than the treatment I receive now as a retiree. It would be nice if PERA honored its commitment to the members and the retirees and didn’t scapegoat their responsibility. It would be wonderful if PERA actually did “fight” for its members/retirees. The qualifying of the COLA increases is sneaky and nasty. Not fighting for the WEP/GPO issue is also appalling! The directors need to stop “reporting” the wonderful “facts” about the system and get down to business. Work on behalf of the members/retirees.

  3. Lauri Gephart says:

    It’s time for PERA and the State Legislature to find a way to roll PERACare participants into the State Employees’ health care plans. No excuses – they have been capable of breaking commitments to Retirees when it was convenient and we were easy targets. The premiums need to be lowered for retiree plans to offset taking our annual increases. The Legislative Council can write a bill to enable Dept of Personnel (or whoever) to contract for the coverage pool to include us. We need a couple of Representatives and Senators to sponsor the bill and to advocate for us.

    • Christopher J Richards says:

      Agreed, but it will never happen as long as the Republicans control the Senate. In particular, Sen Cory Gardner has been the single largest obstacle to fairness toward PERA retirees and WEP issues …VOTE!!!

  4. Gary Vigil says:

    PeraCare Premedicare costs are ridiculous & unaffordable. Dont know what the PeraCare staff are following. Premiums have been outrageous for years with very little coverage.

  5. Bill says:

    I retired from LPS as a teacher for 33 years in 2008 & my wife & I were on the pre – Medicare plan as well. It was so expensive & covered so little that I had to take a part time job just to cover the premiums until I got to age 65 & was covered by medicate + a PERA supplemental plan for less than 1/2 the cost of the pre – Medicare plans and they actually cover medical costs that come up as we age. My sister who only taught for 12 years in Alpharetta Georgia when she retired about the same time as me . However she and her husband were able to keep the same medical plan that she had with the school district when she was teaching full time. Why can’t we do that here? As I understand it, when you retire here in Colorado and you get into the pre – Medicare plans the reason they are so expensive is because of the pool you are in. Everyone is older with no young people the help offset the costs. Why does it have to be that way? How many other states are like Georgia? What did they do that we in Colorado have not done?

    • David says:

      I’m not sure, but I know that in N. Carolina school districts align with their county government, which, if Georgia does that too, may allow it to pool with county/school district. Since we don’t do that, maybe our school districts are too small and disparate to pull that off.

  6. R Cook says:

    I am a retired PERA member (66) with a teaching wife who is 52. She has 33 years of PERA credit and is eligible to retire, but (we) have made the decision that she will continue teaching until 55 because of the lack of reasonable and affordable pre-Medicare coverage through PERA. Though eligible for Medicare, my wife carries me on her district medical plan, it’s cheaper for both of us. I agree with Lauri above, PERA has totally thrown retirees under the bus with little to no regard to previous commitments to the retiree.

    • David says:

      At a PERA info meeting, I talked to a guy preparing to retire. He mentioned that PERA’s longevity stipend to offset the high cost of insurance premiums has not been adjusted for like 20 years. I mentioned this to a PERA board member who brought this up at a board meeting. Other Board members agreed they should take a look at this, so let’s hope they do.

      But I disagree with the idea that PERA isn’t trying. Our pension has been walking a political tight rope over the years and has come across in tact. Treasurer Thomas is now on our side and should be tapped to promote improvements in 2020.

  7. Retiree says:

    PERA needs to form an advocate section to fight, lobby and look for retires benefits.

    There are no creativity or interest at management level to help the retires. On the last town meeting I asked why PERA lacks creativity to introduce new ways to help the retires.

    This is a big organization with thousands of members like AARP or AAA. Least PERA can look into would be to negotiate discounts with number of companies like insurances, restaurants, hotels, discount drug programs, club memberships and many more programs to ease some costs for retires. Since 2010 which cost of living increase was literally stolen and never added back even when market has done great, we also have been hit with skyrocketing health care and other price increases. There has been no real efforts to increase health subsidies to offset this or any fight to bring back basic increase in cost of living. Unfair and Unethical.

    • PERA On The Issues says:

      Thanks for writing. I will have someone from PERA reach out to you about our Ambassador Program, which you might find of interest.

  8. Dave Lovell says:

    I agree with the comments above. My healthcare premium increased $250 per month the first year of zero COLA increase and has gone up another $100 per month his year. All the articles talking about a decrease in premiums of up to 18% in the insurance exchange doesn’t seem to translate over to PERA Care and reading all the “good news” on health care costs going down is like nails scratching on a chalkboard. On top of that the 1 year delay in implementing the quarter point decline in our COLA payout when we finally receive it this next July will be a slap in the face of retirees based upon a bad stock year in 2018 especially since it looks like we will have positive returns in 2019. It is unclear to me why PERA is so delayed and dysfunctional in the implementation of its accounting practices. In reality the quarter point decline in COLA should have been reflected in 2019 during our second year freeze and next July’s COLA payout should be based upon the 2019 stock market returns.

  9. Linda says:

    Can anyone give me a legitimate, factual reason why the same surgery is so much less expensive in other countries, such as India or Mexico. Why are medical prices so much more expensive in the USA ???
    Is it greed? Are there legitimate reasons?

  10. Christopher J Richards says:

    Agreed, but it will never happen as long as the Republicans control the Senate. In particular, Sen Cory Gardner has been the single largest obstacle to fairness toward PERA retirees and WEP issues …VOTE!!!

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