Tuesday, September 25, 2007

The Battle Over Health Care Benefits

Thousands of striking Hoosier GM workers say they are striking for job security assurances from their employer. Others say their resistance to shouldering some health insurance expenses is the real crux of the strike. The reality faced by most American workers is fewer health insurance benefits from their employers. The days when you can retire from your job with full health insurance benefits until the day you die are pretty much over--at least for most.

Gary Mayor Rudolph Clay is raising a ruckus among that city's retired police and firefighters by proposing the elimination of health insurance benefits for retired employees who qualify for Medicare or Medicaid. The Gary Post Tribune writes:

A group of retired police and firefighters from Gary have started researching whether the city can legally eliminate their health care benefits.

Peter Blanco, a member of the Retired Police & Firefighters Association of Indiana Inc., said more research is needed, but legal action hasn't been ruled out yet.

"We're looking to see what rights we have," Blanco said.

Members of the group became upset after they read a guest column by Mayor Rudy Clay published in the Post-Tribune last week.

"In compliance with state law," Clay wrote, "we have eliminated insurance for retirees who are eligible for Medicare and Medicaid."

Celita Green, Gary's financial controller, could not be reached for comment.

Blanco and Jay Massa, the treasurer for the local chapter of the Retired Police & Firefighters Association, said they were upset that this was the first they learned of what was happening. Gary's 2008 operating budget was adopted by the City Council last week.

Clay, meanwhile, stood by his column and attributed his information to East Chicago City Hall. "According to the mayor of East Chicago, and according to what I'm being told," Clay said, "if you retire and you are over 65 years old, the city must stop paying insurance for you." Del Stout, the president of the Gary Fraternal Order of Police, said the city is using the law to get around the fact it couldn't reach an agreement with the city's unions.

"We told them pretty clearly that we were opposed to any changes," Stout said.
However, Stout said, the FOP is also doing research to determine whether any legal action is necessary.

"We just kind of want to check," Stout said.

Indiana lawmakers created a firestorm when they established a health insurance for life benefit for retired lawmakers. That plan was eliminated, leading to the early retirement of many lawmakers seeking to take advantage of the plan before its total elimination. I understand that many school districts in Indiana provide a similar life time benefit for school administrators. Public employees are going to have to learn to deal with fewer benefits just like their counterparts in the private sector, who no longer can afford the taxes to support generous pension and health care plans for public employees.

7 comments:

Sir Hailstone said...

The well has run dry in Gary. There's no property worth taxing. Industry no longer props up these corrupt governments as in years past, since the latest property tax reform in the late 1990's. There is not enough sales and income tax revenue in Gary to keep government running.

The years of corruption in Northern Lake County has come to fruition. It took 40 years to collapse but here it is - a smoldering monument of ruin paying homage to Democrat government.

Give Bart Peterson another term and in about 10 more years Indianapolis will be that same ruin.

Anonymous said...

Do some reading on the Oregon PERS system and the lawsuits that were filed after the state removed promised pension benefits. Government can do what it pleases and change the rules at any time, including after retirement, and government judges will back it up.

Doug said...

As far as retirees are concerned, it just seems wrong to renege on a promise. They can't take back the labor or the time provided. Part of the basis of that exchange was a promise of health care through retirement.

I sympathize with employers. I don't think it was ever a particularly good idea to tie health care to employment.

To me, at the end of the day, the big question is what has gone wrong in this country that folks have to work the same or more and get less? Our workers are more productive than ever, and yet health care is becoming more and more elusive.

Sir Hailstone said...

Doug - that's because it's increasingly expensive to provide the level of healthcare coverage of years past. Thanks to ambulance chasing slip-and-fall lawyers like John "The Breck Girl" Edwards. They make a living suing doctors, hospitals, and everything else connected to healthcare then complain when the cost of healthcare is out of control. Why do ob/gyn's increasing leave the specialty?

Doug said...

I haven't seen convincing evidence that malpractice lawsuits are a significant component of health care cost increases. The information I've seen - and I can't cite a source anymore, sorry - suggests that malpractice payouts have been more or less level in the past 15 years or so while, at the same time, malpractice premiums and health care costs generally have gone up annually by double digit percentages.

Unless there is data out there suggesting that malpractice suit costs are keeping pace with malpractice premiums and health care costs generally, I think we need to look for better explanations for the increase in health costs; satisfying as it may be to blame the lawyers.

Jason said...

I can give you one plausible explanation. 90% of the patients that walk into the Wishard ER don't pay their bill.

It used to be people were fine and good and then suddenly they dropped dead one day. As people increasingly live longer and longer and medical technology gets better and better, the cost of that enhanced medical care is going to increase. 30 years ago the thought of someone in their 20's being on cholesterol medication was nonexistent. Now Lipitor is used by virtually everybody. In addition, whereas many cancer presentations were formerly a death sentence, now people can go through round after round of chemotherapy, sometimes enduring years (and hundreds of thousands of dollars) of treatment. Lots of people who had insurance and cancer still ended up having to file for bankruptcy.

20 years ago if you walked into an ER with a broken finger they gave you 6 inches of tape and a popsicle stick. Now it's x-rayed, wrapped, bandaged, and you're given pain medication. While I'm not certain, I would think a lot of it is due to malpractice concerns...

Sir Hailstone said...

"20 years ago if you walked into an ER with a broken finger they gave you 6 inches of tape and a popsicle stick. Now it's x-rayed, wrapped, bandaged, and you're given pain medication. While I'm not certain, I would think a lot of it is due to malpractice concerns..."

Doug - this is what I'm referring. Not the actual suits themselves its the "preventive medicine" being practiced because of the threat of such suits being filed. That plus the malpractice issue by the slip-and-falls isn't helping.

Jason - that plus maybe an MRI on the injured hand just to make sure. I'm curious as to whether the amount of indigence the hospitals must write off increase proportionally or disproportionally to the cost of health care.