County Administrator: It’s Unfair for Early Retirees to Demand Subsidies From Active Employees
I have reviewed the Guest Commentary that appeared in the April 21 edition of the Tucson Weekly.
The issue is relatively simple: Early retirees of Pima County—those who were eligible and could afford to do so—want to continue to receive significantly subsidized medical insurance paid for by taxpayers, as well as, unfortunately, subsidized by our active (non-retired) employees. This is neither appropriate nor fair.
With economic circumstances being what they are today, I see no reason why taxpayers should continue to subsidize those former county employees who retired before the Medicare-eligible age of 65. These pre-Medicare-age early retirees use health-care services twice as much as our active employees, drive premium rates higher and, consequently, cost the taxpayers and active employees more. They have a medical-insurance plan designed specifically for them. It is offered by the state retirement systems.
We have provided to these retirees and everyone who requested it the actuarial data and information upon which their rates would be based. It is available and can be easily accessed on the Pima County webpage at www.pima.gov.
We contract with UnitedHealthcare (UHC) for medical insurance because UHC provides insurance services for our employees at the best value and the most reasonable cost.
I recommended the Board of Supervisors discontinue allowing our pre-Medicare-age early retirees the option of buying into our active employee medical insurance plan.
The present cost to provide health insurance for our employees for fiscal year 2011/2012 will be $36.1 million, with employees paying $4.7 million, and taxpayers paying $31.4 million. To cover retirees would have cost an additional $9.1 million.
Early pre-Medicare age retirees have a plan designed specifically for them, available through the state retirement systems. It is unfair for them, in these difficult economic times, to continue to demand to be substantially subsidized by taxpayers and to shift their health-care costs to our active employees.
C.H. Huckelberry
county administrator
This article appears in May 5-11, 2011.
Mr. Huckelberry can continue to write all he wants on this subject – we can only hope that someday he get his facts straight! The TAXPAYER DOES NOT SUBSIDIZE the retiree’s health care costs. That would be a gift of taxpayer money. Geez, does he really think you don’t know that or is he just playing to your emotions? With his 200 thousand dollar plus salary – I don’t think he has to be as concerned with what his healthcare costs will be.
As far as his statements about this groups healthcare usage……I think its been said before – but “don’t trust the numbers guy” – he will always make the numbers read in favor of his decision. However in this case, their own HR department supplied us with numbers that contradict his statement. Hopefully the Board of Supervisors are taking a closer look at his decision and “his facts” before they stand with him on this issue. Why is it that Maricopa County still includes their retirees in their insurance plan and most of the larger counties do as well? Dire financial straits in Pima County – really? Have you read some of the articles on the surplus the county has?
As far as the retirees retiring before medicare eligiblity – all I can say on that is this – we all had to adhere to the Arizona State Retirement rules and policies. Most of this group has served the county for 25+ years.
I submit to you that if Huckelberry and the Board of Supervisors don’t keep their promises to their own retirees – what chance as taxpayers do we have of them keeping promises to us?
The County Administrator speaks about fairness in his letter to the editor about the Board of Supervisors’ decision to rescind the Retiree Insurance Program.
What is unfair is:
1. Taking away a benefit program which has been promised and provided to Pima County pre-Medicare Retirees for 40 years;
2. Failing to apply for Federal Assistance to help defray any additional costs which might be incurred to continue this program;
3. Withholding claims data which would determine if, in fact, Retirees are more expensive to insure than active employees of the same age group;
4. Withholding data to determine if, in fact, the County’s contract with United Healthcare is cost effective;
5. Claiming that Retirees have a viable option of using the Arizona State Retirement System/United Healthcare plan, when that “option” costs Retirees thousands of dollars more per year (out of pocket) than the Pima County plan; and finally
6. Claiming that taxpayers or active employees subsidize Retiree health insurance when, in fact, Retirees pay 100% of their premium cost.
As a Pima County retiree I can assure you that I pay for my own health benefits with NO help from the tax payers. Am I calling Chuck a liar ? You bet I am and I’d like to hear him try to disprove it.
Huckelberry has not been honest with the tax payers about many topics but trying to infer that they were expected to pay for the retirees insurance is just wrong. The retirees paid the full premium for their health benefits. They did not attempt to demand anything that had not been promised to them in the merit system rules and policies throughout the years. When he cancelled the retirees insurance coverage, the policy still stated we were entitled to be covered. He did not even have the authority to cancel it. It was the BOS that should have made that call. The policy was not changed until six months after our benefits were cancelled. He never gave us the opportunity to meet and discuss the possibility of continuing our benefits. We were expected to go to the state plan and as a result some of the retirees no longer are able to carry health insurance because of the high cost. The tax payers should be aware of what type of person is running the county and is in charge of their money paid through taxes. He is not exactly on the up and up.
As a follow up – I offer this as additional information when you read and consider Mr. Huckelberry’s spin on this situation: On December 28th Mr Huckelberry wrote a memo to the Board of Supervisors regarding his issue and in this memo he states “These retirees receive no employer contribution from the county and essentially pay the FULL premium cost.”
I submit to you that he is “playing to your emotions” on this issue and misleading the taxpayer. We are all suffering during this economic time – or are we? Those with the higher salaries are busy putting their spin and justifcation for taking away earned benefits.
It is very disappointing to have a County Administrator so out of touch with his constituents (County Employees and Retirees) that he does not even know the facts and give us the same rhetoric.
After 20 years of “contribution” to Pima County, and thus not having an appropriate wage compared to the rest of the nation – Arizona is typically very low in wages – the retirees were told with an unsigned letter that Pima County would not “return” via County Health Insurance, our “contribution” that funded previous retirees. This was disheartening and costly at a time in life when we (retirees) have very limited income and no future “raises” on a fixed retirement income and thus we should not have to pay more than employed County employees who still have choices to fund their future health insurance when they retire. We (retirees) were not given any opportunity to “save” for Mr. Huckleberry’s decision to not fund our 20 plus years of County employment “benefits” health insurance which ====== has never been funded by taxpayers because the retirees employment contributions funded the health insurance that should have been given to the retirees after 20 years or more of service to Pima County.
It is always amazing that Mr. Huckleberry cannot see giving retired citizens of Pima County adequate health insurance and is totally misinformed that the “taxpayers” would pay?? for something that we former County employees already contributed!!! Amazing, I wonder what “contributions” we taxpayers will make toward the cost of Rosemount Mining?
It makes since that retirees (being older) use more medical services. Users of more medical services drive insurance prices up for folks who use less services (in this case, younger, active employees). The higher price per person costs active employees and the government/taxpayer more money. How much that difference is, I have no idea, but what the other commenters are saying/implying is surely incorrect regarding whether retirees increase costs for the county and active employees. Whether they pay the full premium or not, the cost per person is higher because older people drive up the cost of insurance by simply using more services.
Just a guy – here are some thoughts:
1) yes the “older” retiree (ages 51 to 64) in this case MAY use the health care coverage more to maintain their health – but why do we have insurance if we can’t use it? Raises the question – why does one have health insurance if they are penalized by using it? It’s good enough to pay the high premimums and higher out of pocket costs – but then everyone wants to drop you when you use it! In this case however, the numbers don’t support the usage by this group as Huckelberry has stated.
2) As county employees we paid for retirees (this practice has been in place for the last 40 years) when we were there. I don’t recall anyone complaining about higher costs to cover the retirees (knowing that someday that would be us)! Also consider that Huckelberry’s numbers are inflated and the “higher costs” that the county keeps shoving down the employees throat overstated.
3) Consider the age group of the current county employees – they may be older than you think! Those employees that were getting ready to retire can’t afford it now. The retiree group membership is growing in part because of the new interest of the current employees. They are now becoming aware of the TRUE costs of this issue.
Last but not least – don’t be shortsighted on this issue – you may not be of “age” yet for this to be a concern – but I promise you will be! Be proactive on the issue not reactive! This group of retirees didn’t get the chance – they believed in Pima county and the promise of the earned benefit of being included in the health insurance plan.
Response to “Just a Guy”. The retirees whose insurance was cancelled are in the age group 50-64. They are not medicare eligible. These people met all the requirements in the merit system rules and policies they followed their entire working life with Pima County and once retired, their promises as specified in those rules were removed. We were accused of using our medical benefits and causing the cost to rise for the active employees. When we requested a comparison of the active employee costs in our age group versus the costs for our retiree group, we were denied. Any time you take the costs of the active employees in our age group and lump it with the costs of active employees who are between 18 and 50, of course the use of medical coverage is going to be a lot less. To isolate the older employees or in our case the retirees and look strictly at their costs, the amount is going to be higher. Perhaps “Just a Guy” should look at the entire picture before he determines that the retirees are the sole reason the costs of the active employee health insurance is rising. Maybe it is because all people in our age group that use health insurance is causing it to rise. Would he suggest dropping the active employees in our age group to keep the active employees aged under 50 to keep the cost down? Where do you draw the line? Shouldn’t the retirees have been grandfathered into the insurance policy since they were not given an opportunity to plan for an alternative?
I neither stated nor implied that retirees who are under Medicare age should not be allowed to participate in the County healthcare coverage. There were statements that implied that retiree use of the County healthcare coverage does not cost the taxpayer any money, and I stated that I don’t believe that to be true. Because insurance rates are higher for older people (a simple actuarial fact of life), and retirees are, practically by definition older people, the cost per covered person is higher for the county due to the increase in the average age of insureds covered. Since part of the benefits package for county employees is coverage of part (most, I believe) of the total insurance cost, retirees do add to the bottom line of the County and the taxpayer. Again, I am not saying that retirees shouldn’t be able to buy in to the County health plan, but to say that retirees don’t increase costs is almost certainly false. I have certainly not seen the numbers or looked at the actuarial tables, but even a little knowledge about how insurance works bears out my point. How significant is that added cost? I have no idea. But then, I never said that retirees are bankrupting the County, either. It may add significant cost, or it may not. This is obviously a more directly personal matter for some of you than it is for me, but I merely pointed out what seemed to me as an over-reaching argument. You can agree or disagree with that, but the implication in the responses to my post were that I wanted to cut retirees out of the coverage, and that is simply not true.
Just a guy: thank you for your comments and I understand. However, did you consider that out of the 5,000+ active employees that there are a large number of “older” active employees and they are included in the county’s health plan – so please give that consideration too. These “older” employees can’t retire because of the new high cost of United HealthCare’s coverage under the state. Thus, they continue to add to the countys costs in healthcare.
Ask yourself why the county did not solicit input and work with their retirees such as the city as done. The Board of Supervisors and the county administrator continue to avoid conversations with the retirees on this issue – it is beginning to look like there is something to hide in all of this…I believe the retirees have been open to discussion in looking for solutions to the problem – yet it appears the heavy hand of government has spoken and forgot that they represent the people.
I am still baffled that in this country – we are choosing to say if the “older” person is a high user (which there is some debate on the usage) we need to eliminate them from the plan……..If we all start thinking like this – everyone might as well consider dropping healthcare coverage (which is already the case for some because of the high costs) and see where we should go from there. Or better yet, just get on a government “give away plan”.