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TO: Mayor John Laesh
FROM: Elizabeth Coronado, Interim Chief Human Resources Officer
DATE: September 12, 2025
SUBJECT:
A Resolution Authorizing an Agreement with Humana to administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2026, through December 31, 2026.
PURPOSE:
To authorize an agreement with Humana to administer a Medicare Advantage (MA) Plan for Medicare eligible retirees.
BACKGROUND:
January 1, 2022, the City of Aurora moved the Post-65 Medicare retirees from the Aetna Medicare Advantage plan over to Humana’s Medicare Advantage Plan. Under the Humana Medicare Advantage Plan the city saved 43.3%, or approximately $835,730. The below is the rate history since 2019:
2020: $343.35 Per Retiree Per Month
2021: $314.84 Per Retiree Per Month
2022: $178.55 Per Retiree Per Month
2023: $199.98 Per Retiree Per Month
2024 $214.86 Per Retiree Per Month
2025 $249.66 Per-Retiree Per Month
2026: $276.67 Per-Retiree Per Month (Proposed)
DISCUSSION:
Human's initial proposal for the 2026 renewal was 21.09%. The main factors generating the increase are that Centers for Medicare & Medicaid Services Centers (CMS) are making notable revisions to Medicare Advantage Program starting in 2025. The revisions impacting the plan are:
- Ratebook resulted in Centers for Medicare & Medicaid Services Centers for Medicare & Medicaid Services payment reductions.
- The change in Risk Score Normalization: At a high level, Centers for Medicare & Medicaid Services are moving from a single five-year linear regression methodology to a multiple year regression methodology. The result of this regulatory change (linear to multiple year) for risk normalization is a lower paid risk score, i.e., revenue from Centers for Medicare & Medicaid Services.
- Medical Claims cost increased 9.9% over 2024.
- Rx claims have increased 15.1% over 2024, with a significant increase in GLP-1 cost for diabetes and weight loss.
- Retiree’s out of pocket cost have not changed year over year as their plan design has never been adjusted since 2018.
- When the retiree turns 65, the rates are frozen at whatever rate they were at that year for their specific benefits class.
Humana Plan Highlights:
- Silver Sneakers - Fitness Program that allows member to utilize many participating gyms, fitness classes, and virtual workout classes for $0 (Flyer attached)
- Home Delivery Meal Program - 14 days after in-patient stay
- Go 365 Wellness Program included
- Post-Discharge Personal Home Care
The Human Resources Department and Assured Partners recommends increasing the deductible on the Humana plan from $225 to $500 which will reduce the renewal from a 21.09% increase to a 10.81% increase. The Humana renewal rate for the Post-65 retiree health plan with a $500 deductible is $276.67 effective January 1, 2026. Retaining Humana for another year will alleviate service challenges that could otherwise be experienced by plan participants if the city were to change insurers.
IMPACT STATEMENT:
No impact.
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to the City Council.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing an Agreement with Humana to Administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2026, through December 31, 2026.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, it is in the best interests of the City of Aurora to continue a contractual relationship by and between the City of Aurora and Humana for administration of a Medicare Advantage Plan for Medicare eligible retirees; and
WHEREAS, the 2026 proposed City budget provides funding for this item in employee health account 602-0000-410-.28-02; 602-0000-410.28-04; 602-0000-410.28-21; and retiree health account numbers 704-0000-41.28-52; 704-0000-410.28-54; 704-0000-410.28-62; 704-0000-410.28-64; 704-0000-410.28.72; 704-0000-410.28-74
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Mayor if hereby authorized to enter into an agreement with Humana for the period of January 1, 2026, through December 31, 2026.