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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 poc...
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