PEBB Update 4-4-2025

The health insurance companies that contract with our Public Employees Benefits Board (PEBB)—Providence, Kaiser, and Moda—are raking in record sums from our state and public universities at the same time as they are raising costs for PEBB well above inflation. In 2024, Providence received nearly $3 billion in premiums and had over $8.2 billion in reserves, while Kaiser reported a whopping $12.9 billion in net income.

For the 2025 plan year, the insurance companies increased rates more than $21 million above the 3.4% cap. (Compare this to the more than $18 million that the Kaiser and Providence CEOs make combined.) To reduce costs, the PEBB board was able to take a balanced approach, using PEBB reserves and changes in the plan design to hold down costs as much as possible. As a Union, we were able to successfully maintain the 1% premium share on lower cost plans for state workers, and the 3% premium share for the lowest cost plan for Higher Education workers. We worked hard on the PEBB board to push Providence, Moda and Kaiser to provide alternatives to higher co-pays and deductibles during your medical visits and, while there was some amount of cost shifting to workers in the end, it was minimized.

Now, we are facing an even more difficult renewal for 2026. Insurance companies are increasing their rates even higher, leaving us more than $70 million above the 3.4% cost cap. This means our PEBB board has very difficult decisions to make for the 2026 plan year. PEBB is being forced to consider options such as eliminating the Health Engagement Model (HEM) incentive (the taxed $17.50/month that shows up in your paycheck), higher co-pays, deductibles and out of pocket maximums, along with changes to how prescription drugs are delivered. We want you to be informed about what’s happening and to know our options – so please stay tuned for further updates as plan design decisions will be made by the PEBB board in May.

Please also note, PEBB is in the first stages of a request for proposals (RFP) process for the 2027 plan year which means PEBB will be looking at different health care carriers as one of the ways to control health care costs (current carriers are Providence, Moda and Kaiser). Our Union worked with PEBB to send a survey to all PEBB members to hear your priorities as we want to be sure your voice is helping shape the process. We know that your health care benefits are a priority, and our Union will continue our fight to ensure you have access to quality and affordable healthcare.