Retirees, too, hit hard by health care proposal

House Bill 5345 isn’t just for current public employees—retirees would be forced into a mandated, state-controlled health insurance plan, too.

And the effect on their retiree health coverage is just as devastating!

Under House Speak Andy Dillon’s scheme, retirees would continue to have some sort of health care coverage, but it would likely look very different from existing coverage. Under HB 5345, a 13-member board of political appointees will determine which plans will be offered. There is no guarantee that a retiree will serve on that board and that retiree interests will be fully addressed.

A politically appointed control board will determine which doctors are acceptable and what treatments are necessary. HB 5345 gives state government power over a patient’s medical care and puts state government between patients and their doctors.

What retirees can bank on is increased copays, higher deductibles and benefit reductions.
HB 5345 promises $900 million in savings but experts are skeptical. In order to realize any savings, health benefits will be reduced, while costs will increase.

Increasing costs and benefits changes are not new to retirees. They are regularly seeing their insurance costs increase and some benefits being reduced. But with this scheme, state government will be managing a huge insurance pool, and its track record in running existing programs is neither admirable nor successful.

More important, for retirees, is the issue of any unfunded liabilities. At the first hearing on the bill, Kate Kohn-Parrot, Speaker Dillon’s paid expert, was asked who would be held responsible for any outstanding liabilities.

She answered, “It won’t be the state. We will bill back the amount to the appropriate group.”
Other states have tried state-run health plans with disastrous results. It’s costing North Carolina taxpayers $250 million to bail out their plan. In two years, they’ll be paying $675 million. The West Virginia plan is in so much trouble that the state is proposing to cut off all retirees from any health insurance coverage in order to balance its books.

No one—no current employee nor retiree—is a winner in this health care gamble.

Updated: October 6, 2009