The CalSTRS Medicare Premium Payment Program (MPPP) was established by legislation in 2000 and can be found in the Teachers’ Retirement Law (section 25940). The MPPP is funded in part by employer contributions.
CalSTRS pays Medicare Part A premiums for eligible members. CalSTRS deducts Medicare Part B premiums from retirement or disability allowances. Premiums and assessments are forwarded to the Centers for Medicare & Medicaid Services.
Premium costs vary by individual. CalSTRS does not determine the amount of your premiums. To determine the amount of your premiums, please contact Social Security. Medicare premiums:
- Are paid in advance
- Reflect the annual change in premium costs as determined by the federal government
Medicare Part B premiums:
- Can be deducted from retirement or disability benefits
- Will be higher for those who are assessed a/an:
- Medicare Part B surcharge
- Income Related Monthly Adjustment Amount (sometimes referred to as IRMAA)
The Teachers’ Retirement Board has investigated alternatives to relieve the financial burden associated with health care coverage for many retired educators. Paying Medicare Part A premiums for those without premium-free Medicare Part A coverage is an important step toward that goal.
Senate Bill 1435 – Johnston (Chapter 1032, Statutes of 2000), established the California State Teachers’ Retirement System (CalSTRS) Medicare Benefits Program. Since July 1, 2001, CalSTRS will pay the Medicare Part A premiums for retired members of the Defined Benefit (DB) Program who are not eligible for premium-free Part A (hospitalization).
All premiums and any applicable surcharges (penalties for late enrollment into Medicare after age 65) are paid directly to the Health Care Financing Administration, which administers the Medicare program for the federal government.
SB 1435 also provides the Teachers’ Retirement Board with authority to extend this benefit to eligible active members who retire in the future under specific circumstances. Currently, the program is extended to members whose most recent retirement is prior to July 1, 2012.