Proposed health insurance changes would increase costs for city retirees and employees
By Daniel Connolly, The Commercial Appeal, Memphis, Tenn. | |
McClatchy-Tribune Information Services |
Weeks after Wharton's announcement, Locastro still doesn't know exactly what a health-insurance cut would mean for him and his wife, Sharon.
He said the city hasn't sent him information. "In fact, I get old firemen calling me all the time saying 'What have you heard? What's going on?'" said Locastro, who lives in
If the
Some
To report on the proposed changes, The Commercial Appeal interviewed city retirees, the mayor and his human resources director, as well as health insurance experts with the
The situation is complex and continues to change. But here's a summary of how the proposals would impact different groups:
Current employees
The city employs roughly 6,000 workers, all of whom would see monthly health-insurance premiums rise 57 percent. Costs for the proposed new premiums weren't available.
The city also wants to raise the smoking surcharge from
Retirees
The city provides health insurance to about 4,000 retirees, plus several hundred of their spouses and children. The smoking surcharge and proposed 57 percent premium increase would also apply to all retirees. Otherwise, three different groups of retirees would have different experiences.
Group one: Retirees over 65 who are eligible for
Locastro, the retired firefighter, belongs to the group of roughly 1,500 city retirees who are enrolled in both the city's health insurance and
Locastro could stay on city insurance if the subsidy cut goes through. He'd just have to pay more. He's enrolled in the city's "premier plan," administered by
That number represents 30 percent of the whole premium. The city subsidizes him by paying the other 70 percent. If the city stopped paying the subsidy, his monthly price would rise to
That would eat up more than half of his monthly pension of
So if he couldn't afford city health insurance, wouldn't
To avoid big bills, Locastro might have to buy a type of supplemental health insurance called a Medigap policy. A typical Medigap policy cost
However, health-insurance companies selling Medigap policies may require applicants to submit medical records. The companies can set high rates or refuse to offer coverage at all, said
Locastro has had serious health problems, including bypass surgery, high blood pressure and diabetes. Regardless of retirees' health, the mayor's administration proposes to offer them a private Medigap plan and
Locastro might also have another option: coverage through his wife's insurance. She's only 63 and continues to work as a nurse at
Group Two: Retirees who are over 65 and have little or no access to
About 1,100 retirees can't qualify for
If the council approves the 57 percent premium increase, these retirees' costs would rise. But the city would continue to pay a 70 percent subsidy for these 1,100 retirees.
Group Three: Retirees who haven't turned 65 yet
About 1,400 city retirees are younger than 65 and not yet qualified for
They may be eligible for insurance through a new job. Some may obtain insurance through a spouse -- a total of 488 retirees who are not yet 65 are married to working spouses whose employers offer family medical coverage, but they have chosen to stay on the city plan, said Robinson. "The (city) benefits are richer and cheaper than the spouses', quite frankly," he said.
Or these retirees could find coverage on the new federal exchange.
The prices of exchange plans depend on factors including age, income, where the person lives and whether they smoke, according to the
A single 64-year-old nonsmoker living in Midtown and earning
That's far more expensive than the current city retiree health-insurance premium of
Gold plans for the hypothetical 64-year-old retiree would start at
A sense of betrayal
Perhaps the most vocal opponent of the proposed changes is
He said he was promised retirement benefits and city health insurance when he joined the police force in
He said the cuts would inflict real suffering on vulnerable people who can't pay, and that retirees will take their case to court. "It violates a contract we have with the city. They're just trying to walk over us."
Locastro, the former firefighter, also feels the city is going back on its promise. "To be honest, it's a real sore spot with me right now."
In an interview earlier this month, Mayor Wharton said the pension crisis forces him to make hard choices.
"And although you know in your heart, you know there's no animus whatsoever. And even though you know you weren't sitting up here one day saying, 'What can I do to them today? How can I gouge them one more time?'"
"But you're sitting there, getting a letter saying 'You better straighten out this pension thing or, by George, we're going to come down and straighten it out for you.'" He was referring to letters last year from the state comptroller on bond debt and other financial problems. "When you know that in mid-November, you sat down with your (bond) rating agencies in
Wharton said cutting retiree health care would save an estimated
The debate on health care continues at
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