Retired Teachers Chapter News

Increase in SHIP premiums

Jun 7, 2007 12:19 PM

The Board of Trustees of SHIP, the UFT/RTC Supplemental Health Insurance Program, voted to raise the annual premiums by $60 effective July 1, 2007, citing continuous escalation of drug and other health-care costs for its decision.

SHIP’s actuary reviewed expenditures for 2006 and indicated that SHIP’s income from premiums would be roughly $3 million while subscriber claim benefits would run roughly $6 million.

That $3 million dollar debit gap between income and claim payments to the 60,000 retirees and spouses who subscribe to SHIP is responsible for the premium increase of $60 that will raise the SHIP premium to $120 annually.

The cost to SHIP for mail-order drugs alone soared to over $3 million, or more than 53 percent of total claims last year. Hospital deductible claims were 11 percent of costs at $631,427. Dental was close with $619,839 in claims or 10.87 percent, followed by nurses and home aides with $593,556 in claims or 10.41 percent of total claims paid in 2006.

Substantial claims for orthotics, hearing aids, anesthesia/surgery, local pharmacy drugs and surgical stockings were among the many other benefits SHIP continues to provide.

UFT retirees have counted on SHIP to defray co-pay and health-cost increases and put that money right back into their pockets since this self-insured program was founded in 1977 to supplement their health coverage.

SHIP, still considered one of the best buys in the health-care market today, has not been immune to the soaring costs that are eroding coverage for many Americans. Since SHIP receives no federal, state or city subsidies but relies exclusively on member premiums to meet the cost of claims, the Board of Trustees had no choice but to institute a premium increase so it can continue to preserve the excellent coverage it has always provided.

Those on automatic pension deduction will have $30 per enrollee deducted from the July 2007 pension check with $30 deducted each quarter after that.

Those not on automatic pension deduction will be billed $60 per enrollee for the total 2007 premium increase which can be paid by check or money order. The mailing will include a card to enable you to select automatic premium deduction starting in 2008. This will allow your payment to be paid over the course of a year rather than all at once. For 2008, you will be billed $120 per enrollee for the entire premium unless you sign the check-off card.

A letter from SHIP Director Irene Lospenuso explaining the decision by the SHIP Board to raise premiums has been sent to all retiree members of the program explaining details of the new payment procedures.

Trustees have noted they will continue to monitor coverage and provide greater benefits whenever possible.