Legislature Needs To Renew Rural Subsidy For Health Care Premiums



Historically, the Arizona State Retirement System (ASRS) through the state legislature has provided a subsidy to retired workers on Medicare and residing in the rural counties of Mohave, Gila, Navajo and Apache. The ASRS Health Insurance Program provides two levels of coverage, Medicare Complete and Senior Supplement.

The Medicare Complete offers HMO Limited Service coverage while the Senior Supplement has more comprehensive coverage including the right to see the doctor of your choice. Due to the shortage of doctors and their desire not to enroll in an HMO program with less remuneration, historically, the ASRS has not been able to offer their HMO program in these counties. If this condition continues and the rural subsidy is not renewed, member retirees will be left with only the Senior Supplement option and no subsidy money to help pay for it.

In many instances retirees will not be able to afford the Senior Supplement and perhaps no insurance at all. The rural subsidy for a member and spouse on Medicare is $350 per month or $4,200 annually. This amount represents the difference in cost between the two programs. To remain in place, the subsidy must be renewed by the legislature every two years. The current subsidy expires on June 30.

The position of the new Gov. Jan Brewer and the legislature is uncertain. The estimated annual cost of this subsidy to the state budget is between $6 million and $7 million. Recognizing the current status of state finances, a cut in this subsidy is probable but a 100-percent reduction is unconscionable. All current and future retired workers of state government, school districts, county, cities and towns residing in these four counties are affected, including Payson.

Government officials in these counties along with current retirees should contact their state legislators along with the governor’s office requesting that a bill be initiated to renew this subsidy for FY 2010-11 if not in full, at least partial in amount.

Jim Hippel


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