Press Release: Premium Hike Hits Alabama Teacher Health Plan’s Surviving Spouses
MONTGOMERY, Ala. – In a significant and unfortunate development for approximately 1,500 surviving spouses of Alabama teachers enrolled in Medicare, monthly premiums for the Public Education Employees’ Health Insurance Plan (PEEHIP) will spike from $65 to $260, marking an alarming 300% increase. The change is set to take effect on January 1, 2024, as a consequence of federal policy modifications impacting Medicare payouts and the government’s share of prescription drug costs.
Diane Scott, CFO of the Retirement Systems of Alabama, confirmed the increase on Tuesday, attributing the decision to legislative constraints that require the PEEHIP board to adjust premiums in accordance with rising costs. "The law mandates that premiums for surviving spouses reflect the actual cost to the plan," explained PEEHIP Director Dave Wales. He emphasized that while the board has latitude to adjust active member and retiree premiums, survivors are bound by state law.
This imminent hike is part of broader fiscal challenges faced by the PEEHIP Board, which grapples with a projected budget shortfall of up to $319 million for 2027, largely tied to federal changes. In September, the board sought a $1.3 billion budget request for 2026 to address an escalating deficit and proposed to draw nearly $119 million from a reserve fund.
While lawmakers are deliberating on the request, significant concerns loom over possible solutions. Efforts to consolidate PEEHIP with the State Employees’ Insurance Board were dismissed, leaving the board with few alternatives to mitigate the budget crisis. Scott warned that without legislative support, future premium increases for teachers and retirees may be inevitable.
As discussions continue, the PEEHIP Board is exploring cost-saving opportunities, hoping to alleviate the burdens placed on Alabama’s educators and their families.
Source
Photo credit aldailynews.com