Wednesday, August 20, 2014

The State Reneges on Still Another Commitment

The we-hate-public-employees folks are at it again, this time with a one-sided report attempting to show that Michigan's government retirees are getting gold-plated benefits. The report fails to note the numerous pay cuts, furlough days, pay freezes and increasing co-pays that state workers gave in exchange for those benefits. (The two foundations that funded the report were founded through fortunes made in the insurance and oil industries.)

For most state retirees the Snyder administration doubled the employees' share of insurance premiums. That cut the net retirement income of an average married couple by more than $1,800/year.

A new round of negotiations has resulted in an even greater share of healthcare costs being shifted to retirees:

  • Increases of annual deductibles from $300 to $400 for individuals, for families from $600 to $800
  • Office call co-pays increased 33%
  • Prescription co-pays increased up to 50%
  • Annual in-network out-of-pocket maximum doubled

The people impacted by these changes are retired with a fixed income. Changing benefits negotiated 20-to-30 years ago is nothing more than reneging on a contract.

The response is "we can't afford these benefits anymore." Translation: we don't want to honor the agreements made by the state and, since WE ARE the state, we don't have to. (It's pretty much the same argument used to screw local governments out of revenue sharing.)

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