Teachers and educational support personnel who are covered by the Public Education Employees Health Insurance Program could see increased costs next year.
"Conservatively, we're looking at a $65 million to $75 million shortfall next year," said Leura Canary, Chief Legal Counsel for the Retirement Systems of Alabama.
The RSA administers the program that covers approximately 300,000 lives in Alabama.
Canary explained there are two factors that led to the increased costs -- the rising price of healthcare around the country and new requirements created under the Affordable Care Act.
"Many of the costs are increased benefits, many of which carry no co-pay," Canary said.
PEEHIP members haven't seen an increase in their health insurance premiums and co-pays since the 2011 Fiscal Year, which ran from October 2010 to October 2011. The program, available only to state education employees and their families, offers some of the most affordable plans in the state. The monthly premium for an individual is $15.
The program must now cover and pay in full for products and treatments that used to be shared costs between the employer and the member.
"One example is that birth control is now covered with no co-pay, whereas before it was covered only when medically necessary and then with a copayment from the member," Canary said.
It's unclear how the shortfall will be covered. Canary said the first route will likely be to lobby the legislature for more funds. Any additional money to pay for PEEHIP would come from the Education Trust Fund, which provides appropriations for all non-education entities.
"Someone is going to have to absorb the costs, either the members, the legislature, or unless we get some subsidies from federal programs," Canary said.
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