PSERS Health Options Program: Your Big 3 FAQs Answered

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PSERS members often retire before qualifying for Medicare at age 65. This means getting health insurance coverage for at least a few years (often at a much higher cost) is top-of-mind for retiring educators. Some people have the good fortune of continuing their work health benefits after retirement or joining their spouses’ health plan at work. Others are left with a few options: COBRA, the Pennsylvania Health Insurance Marketplace (Pennie) and the PSERS Health Options Program (HOP). You can learn more about each of these options here.

For many PSERS members, HOP is a good option for health coverage. This article will focus on HOP and answer the three most common questions PSERS members ask when exploring the program.

1. What type of coverage does HOP offer?

HOP offers two categories of health plans- coverage for those who are not yet age 65 and those who are at or over age 65 and qualify for Medicare.

What does the PSERS Health Options Program offer for retirees under age 65?

The plan HOP offers for those who are not yet Medicare age is called the Pre-65 Medical Plan. This plan is meant to replace your work health plan until you reach age 65. In general, it will likely work very much like the plan you’re used to at work except the out-of-pocket maximums, deductible, cost-sharing and monthly premiums could be much different.

The plan costs and other provisions change often and depend on whether you are receiving care from an in-network or out-of-network provider. 

Here is a summary of the plan highlights for 2022:

Annual Deductible$1,500 per person
Annual Out-of-Pocket Max$5,500 per person
Annual Benefit Max$300,000 per person
Member In-Network Cost Sharing (after deductible)25% of costs (often lower costs)
Member Out-of-Network Cost Sharing (after deductible)40% of costs (often higher costs)
NetworkPrivate Health Systems

After fulfilling the deductible by paying the first $1,500 for care, you will pay 25% of the costs for most covered in-network medical services like doctor’s visits, surgeries, hospital care, urgent care, skilled nursing, and home health care. You will pay 40% of the costs for out-of-network care.

Those enrolling in the Pre-65 Medical Plan may add a prescription drug plan for an additional monthly cost. After an annual deductible of $350, the drug plan covers a portion of in-network drug costs depending on the type of drug. Once the retiree pays the first $350 of prescriptions, the drug plan will cover 50% of generic drugs, 50% of brand-name drugs and the lesser of 50% or $100 of critical care drugs. 

What coverage does HOP offer to those over 65 who qualify for Medicare??

It is a common misconception that Medicare comes at no cost. That isn’t the case. Medicare Part A doesn’t have a monthly premium for most people but there is a $1,550 deductible each year and a hospital stay lasting more than 60 days can cost almost $400 per day.

Medicare Part B, which covers doctor visits and other outpatient care, costs between $170.10 – $587.30 per month depending on your income. Part B has an annual deductible of $233 and most people will pay 20% of care costs after reaching that deductible. You can learn more about the costs of Parts A and B here.

For retirees who are Medicare-age, HOP offers several supplemental Medicare plans that help cover these out-of-pocket costs associated with Parts A and B. These are called the HOP Medical Plan and the Value Medical Plan.

HOP Medical Plan

The HOP Medical Plan is for those who choose to enroll in Medicare Parts A and B (also known as Original Medicare). The HOP Medical Plan covers most of the out-of-pocket costs associated with Medicare Parts A and B like office visit co-pays and annual deductibles.

Value Medical Plan

Those PSERS retirees who want less coverage and lower monthly premiums might find the Value Medical Plan to be a good fit. This plan helps to cover higher medical costs but less of the smaller and more frequent deductibles and co-pays. After you pay an annual deductible of $233 in 2022, the plan covers 80% of the cost of doctor’s visits. If you are admitted to the hospital, you pay a one-time $300 co-pay and the plan covers the rest of the co-pays and deductibles charged by Medicare for the rest of your stay.

HOP offers several other plans that complement Medicare Parts A and B. One covers prescriptions and the other dental and vision.

Medicare Prescription Drug Plans

These plans are customized Medicare Part D plans made to fit well with the HOP Medical and Value Plans. HOP offers an Enhanced, Basic and Value prescription plan. Each offers a different level of coverage and monthly cost. You can learn more about the prescription drug plans here.

Dental and Vision Plans

If you enroll in the HOP Medical or Value Plan when you qualify for Medicare, you can add dental and vision coverage. It is important to note that you must enroll in dental and vision coverage through HOP when you are first eligible for Medicare benefits. Otherwise, you can only add this additional coverage if you experience a qualifying event. You can learn about qualifying events here.

Medicare Advantage Plans

Advantage plans combine coverage for hospital care, doctor’s visits, and prescriptions all in one place. HOP offers Advantage plans through several major health insurance companies and the plans available depend on where you live within Pennsylvania. These plans include coverage for hospital stays, doctor visits and prescription drugs so you won’t need to purchase a separate prescription drug plan through HOP or Medicare Part D.

2. Who is eligible for the PSERS Health Options Program?

PSERS members, their spouses, their dependent children and their Survivor Annuitants are eligible for coverage under HOP. A Survivor Annuitant is the person you elect to continue your monthly pension payments after you die. This only applies to pension options 2, 3 and 4 because they are the only options that guarantee some or all your pension continuing for the life of someone else. Generally, this is a spouse but there are circumstances where others could be named as a Survivor Annuitant.

Retirees eligible for PSERS Health Options Program plans must enroll within a certain time after a Qualifying Event. Qualifying Events include retirement, losing coverage through your employer, losing coverage through COBRA, reaching Medicare age, certain life changes like divorce and death.

3. How much do the PSERS Health Options Program plans cost?

All plans offered by HOP come at a monthly cost. Here is a summary of the monthly premiums for each plan. This does not include out-of-pocket costs like co-pays, deductibles and coinsurance. Monthly premiums can vary by county.

For example, retirees living in Lancaster County who need coverage before age 65 and enroll in the HOP Pre-65 Medical Plan will pay $990 per person each month. There is an additional $125 per person for prescription drug coverage under the Pre-65 plan.

For those who have reached age 65, the HOP Medical Plan (Medicare Supplement) ranges from $179 – $339 monthly per person depending on the plan level and whether prescription drug coverage is included. The Value Medical Plan ranges from $102 – $162 per person.

The prescription drug plans themselves cost between $22 – $122 monthly per person.

 You can find the costs for all HOP plans in your home county here.

Premium Assistance

For those who qualify, PSERS will cover up to $100 per month of your PSERS Health Options Program premium. PSERS will also cover up to $100 per month if you continue your health coverage through work after you retire. Learn more about premium assistance and see if you qualify here.

The PSERS Health Options Program offers a wide variety of coverage for members who have retired. Whether you are under age 65 and do not yet qualify for Medicare or are of Medicare age and looking for supplemental coverage or an Advantage Plan, you should at least consider if a HOP plan is a good fit for you and your family.

Master your PSERS retirement with the 2024-2025 Retirement Toolkit

If you're thinking about retiring, there is a lot you need to do like:

- Decide how much longer to work
- Choose a pension option
- Decide how to handle your PSERS lump sum
- Figure out health insurance coverage
- Follow the PSERS retirement process

You also want to get clarity on your retirement income and future financial picture.

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