Retirement insights from a Colorado PERA perspective

Issues & Perspectives

What’s in a Health Insurance Premium? Comparing Retiree Health Care Costs

Health visitor and a senior man during home visit. A female nurse or a doctor showing test results on a tablet. High angle view.
Photo credit: Getty Images

In this story:

  • Retirees enrolled in PERACare pre-Medicare plans will see higher monthly premiums in 2022
  • PERACare plans operate under different circumstances than plans on the individual marketplace
  • PERA is working to lower costs wherever possible

Colorado Gov. Jared Polis announced last month that Colorado residents can expect to see big savings on individual insurance premiums in 2022 — about 24 percent, on average. That’s great news for people who don’t receive health insurance through an employer and have to purchase coverage on their own. For retirees enrolled in PERACare’s pre-Medicare plans, it likely came as a surprise that their premiums would instead be going up next year.

PERACare plans operate under slightly different circumstances than those on the individual marketplace, which in Colorado is called Connect for Health Colorado. While those differences can have an impact on a plan’s premium, there are a number of other important factors to consider when shopping for health insurance.

Connect for Health Colorado and PERACare

Insurance premiums — the amount insurance companies charge each month for coverage — are driven primarily by the cost of services and prescription drugs. Those costs have been rising across the country for years, and premiums have largely followed suit.

Colorado lawmakers have made multiple attempts to rein in premium increases in recent years, but they don’t always apply to all plans. In 2020, the legislature established the state’s reinsurance program, which helps cover the cost of expensive claims to keep plan costs down. That program is the key factor in reducing individual premiums for 2022, but it only applies to plans in the individual marketplace and not group plans like those offered by PERACare.

Demographics can also play a big role in the cost of health insurance — think of how a large number of younger people in a group brings down the average age of that group, for example. Insurance plans sold on Connect for Health Colorado are open to the general public and therefore cover people across a wide range of ages and circumstances. PERACare’s pre-Medicare plans, on the other hand, cover only retirees who aren’t yet eligible for Medicare — ages 50 to 64.

Older Americans are more likely to use more medical services than other sections of the population, so plans that only cover aging patients can be more expensive to administer. In addition, the prices for many services, in particular hospital and ER costs, are higher in Colorado than in other areas of the country.

What PERA is doing to lower costs

PERA’s Director of Insurance, Jessica Linart, said PERA understands the challenge of rising health care costs for retirees, and her team negotiates with PERACare insurance carriers to lower costs wherever possible. That can include administrative fees, which are a small portion of the overall cost of a plan. Other costs, like prescription drug prices, can be harder to control because carriers have already negotiated those prices with manufacturers and providers.

One area where PERA can help lower costs is by encouraging retirees to choose less expensive care options.

“PERACare plans have lower copays for higher quality doctors, lower copays for generic drugs versus brand names, and lower costs for outpatient surgeries versus surgeries performed at a hospital,” Linart said. “All of this can help bring down the overall claims costs, which can ultimately lead to lower premiums.”

PERACare plans also cover preventive care at 100 percent and include a fitness center benefit and weight loss programs to help retirees maintain their health, which can reduce overall costs long-term.

Other factors to consider

Premiums aren’t the only cost to consider when shopping for health insurance. Plans can have vastly different out-of-pocket costs like co-pays, coinsurance and deductibles. Then there’s a plan’s out-of-pocket maximum, which is the most a person will pay in a year. There can often be a trade-off with these costs: higher out-of-pocket costs in exchange for lower premiums.

It’s also important to check a plan’s network of providers and formulary, which is the list of covered drugs. Plans will sometimes opt for a small network and formulary to keep prices down. Linart said PERA usually opts for a broader network and formulary, which can be more expensive but provides retirees with more options.

“We encourage retirees to compare their options in PERACare and on the individual marketplace, to find the coverage that best suits their needs for provider and medication access, benefits and monthly premium,” Linart said.

Open enrollment for PERACare’s pre-Medicare and Medicare plans runs through Nov. 17. Open enrollment for Connect for Health Colorado runs through Jan. 15.


  1. Faith Smith says:

    Is there someone in Colo. Spgs. CO
    I could talk with about MediCare?

  2. Paul Katsampes says:

    Is there an easy way to add dental and vision insurance without changing my annual Pera care Medicare advantage?

  3. Anne McMullen says:

    My insurance has gone form $91 a month to over $500 in five years. I have the highest deductible and copays. My financial advisor was
    Shocked to see my retirement dropping so sharply. My husband is working and his companies premiums have dropped. He too is shocked by our premiums

  4. Brad says:

    The BEST information for anyone who is pre-medicare and enrolled in Peracare. As the article states, go to “Connect For Health Colorado” or Compare rates, it is straightforward with no annoying emails or phone calls, you will be glad you did. The only time you can do this change is now!!! So don’t wait and take advance of the huge savings in insurance premiums.

    • Cheryl C says:

      I tried that. After a long process- they (connect for Colorado) informed me that since my spouse and I are offered insurance through the state system- that we are not eligible.

  5. Joseph Thompson says:

    PERA has done an awful job with health insurance cost not only for retirees but state employees as well – as a 30+ year state employee and now retired I have seen nothing that convinces me they work for the state employee -never ending rhetoric and poor performance by the those people who say they look out for our best interests = BS

    • Jeanette says:

      I agree. Each year my PERAcare goes up by $100, but our retirement has not increased in several years. I can’t wait until I am 65 and eligible for Medicare, I will receive a hefty raise by not having to pay $1200 a month for health and dental insurance.

  6. Margaret A Schaefer says:

    I am devastated that next year’s plan does not include Silver Sneakers. Their livestream classes have been a huge part of my life and for some older people ( who could never go to a gym) they are their only contact with the outside world. United’s fitness plan has nothing comparable. Also, Silver Sneakers includes a college save program that many of us have been participating in. We are now losing that opportunity. PLEASE bring back Silver Sneakers.

    • PERA On The Issues says:

      Hi Margaret, UnitedHealthcare’s plans offer a fitness benefit called Renew Active, which includes a free gym membership as well as on-demand workout videos and live streaming classes. You’ll find more information here:

    • Margaret A Schaefer says:

      It’s a poor substitute for SilverSneakers. SS offers numerous livestream classes every day of the week with lively interchanges between participants and instructors. Not all seniors want or are able to go to a gym. Many are homebound. Livestream classes are adaptable to all levels and the instructor is able to answer questions. And – there is no College Save and that is a big loss to those of us who have been participating for several years.

      How about a choice? I would be happy to pay extra to continue with Silver Sneakers.

  7. Gary Justus says:

    Does PERA Health Trust Fund truly contribute the full share to our monthly premiums, as stated in the 65+ mailings? Example: 20 years or more service equals a $115/month contribution by PERA. This would mean that the MA#1 United Health Care Medicare Advantage Plan would have a total monthly premium of $152, in addition to the CMS payments of almost $1000 to UHC. Please verify this is true. Can this be demonstrated somewhere in the PERA CAFR?

    • PERA On The Issues says:

      Colorado law provides for the amount of premium subsidy from the Health Care Trust Funds for benefit recipients enrolled in the PERACare program. An accounting of the PERA subsidies paid can be found in the Health Care Trust Funds section of PERA’s Annual Report. UnitedHealthcare’s 2022 premium for the PERACare Medicare Advantage #1 plan is $152/month. Using your example of a retiree with 20 years of service, PERA would pay $115/month in premium subsidy and the retiree would pay $37/month towards the premium. Medicare Advantage (MA) plans, such as those offered by UnitedHealthcare and Kaiser in the PERACare program, do receive a per enrollee monthly payment from Medicare in exchange for assuming responsibility for the medical claims of enrollees. The monthly payment by Medicare to an MA carrier is not reflected in PERA’s financial reporting as those payments are paid directly to the carrier, not to PERA.

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