Retiree Health Benefits
The subject of retiree health benefits has garnered a great deal of media attention. Agencies offering this benefit fall under the provisions of Government Accounting Standards Board Statement #45. The staggering long term cost of providing this benefit are coming to light and the reaction to that data by the public is predictable – newspapers, columnists and other so-called experts are outraged. In Northern California where I live, a day doesn’t go by without a letter to the editor, news report or editorial about the cost of this benefit. In fact, one area newspaper, in a recent editorial, blamed the State’s fiscal mess on the cost of providing this benefit to retired government employees.
Don’t get me wrong – this is a serious issue that requires the collective action of labor, management and elected officials to address.
But the real solution lies in health care reform. In my view, there are two fundamental issues that reform must address if it is to be successful. First is the escalating cost of health insurance. Before my retirement in 2008, the agency that I worked for had experienced premium increases over a 5-year period of more than 120% – and during the same time, benefit consumption declined! Of course the health insurance providers blamed the doctors, hospitals, pharmaceutical industry….you get the message.
Second, we need to blame ourselves for the poor health choices we make. Simply put, we need to do a better job taking care of ourselves and I wonder to what degree we understand that concept.
I’m afraid that the national debate over health care reform is being controlled by the major players in the health care industry – the insurance companies, hospitals, doctors, etc. Their motivation for maintaining the status quo is quite compelling.
IPMA-HR has been at the forefront of educating HR professionals about this issue – in fact, at the last three International Training Conferences, there have been seminars addressing many aspects of this national issue. However, we need to collectively have a seat at the national table in this debate.
I would like to hear from you about this subject – tell me your insurance horror stories and your successes in complying with GASB #45. What worked, what did, how did you educate your agency’s employees? Tell me your story.
Great topic – did anyone see the story in the SF Chronicle about pension benefits and the impact of retiree health benefits? http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/16/BA1E18Q0V6.DTL
Health care in the U.S.? An emotional issue we try to solve rationally. It’s simply impossible.
When it comes to YOUR health care, I can think and act along what I consider to be rational and reasonable lines, with which many, if not most, would agree.
When it comes to MY health care, or that of my LOVED ONES, I don’t care how much it costs, where I have to go to get it, or the effect on my plan, your plan, or the nation as a whole.
So, given where the business of and market for health care has evolved to, any realistic and affordable “solution” to US health care will necessarily need at least one of two undesirable conditions: limit access and utilization by consumers; or reduce profit margins to insurers and providers.
At least US medicine will be able to keep me alive long enough to see which side blinks first!!!
My instincts say that, given the huge backlash against exhorbitant profit-taking generated by the bank/insurance bailouts of last year, providers and insurers will blink first. While that may make for a tactical victory in some pricing stabilization, my long range Magic 8 Ball says that unchecked or increased utilization will require some form of benefit trimming (read: rationing) later.
As for GASB45, so far it’s reminding me more and more of comparable worth. If you were in our business back in that day, that was the dictum which would bring government to its knees financially. Didn’t quite turn out that way, nor has GASB.
Like most unfunded mandates, it turns into a contest to see who’ll hold whose feet to which fire. So far, I don’t even smell the smoke.
Joe – I agree its an issue with a great deal of emotion and passion from all the stakeholders, but it is one that must be solved to the benefit of the citizens. Right now, under the present system, health care is rationed, the employed and well-off have access to quality care and the unemployed and less wealthy, or those folks who are employed but their employer does not provide health insurance have less access – and we are paying a high price for the current rationing system.
As far as GASB #45 goes, its been a major issue in California and has adversely impacted the finances of many cities and counties, in part, because of the huge increases in the cost of health insurance.
Steve Harman
Happily Retired
[...] my last blog on this subject in July, there have been a number of developments in the national debate about health care reform. [...]
[...] Health Care Debate Continues Since my last blog on this subject in July, there have been a number of developments in the national debate about health care reform. [...]