The biggest problem with this issue is the guaranteed benefits, and the ease of retiring at age 50 putting the public on the hook for many years of health care premiums prior to the retiree reaching Medicare age; leaving less money for ongoing public service such as taking care of public safety and the Parkway.
While the private sector’s response to this issue has created more problems for the worker, though less for corporations, what comes out from an analysis is a good argument for universal health care.
An excerpt.
Daniel Weintraub: In a pickle over plans to pay for retirement
By Daniel Weintraub - Bee ColumnistPublished 12:00 am PDT Sunday, October 15, 2006
When Tim Smith was running for City Council a few years ago in the Sonoma County town of Rohnert Park, he noticed a footnote in a city document that mentioned the public's liability for health care benefits the city had promised its employees in retirement: $39 million.
That seemed like a big number for such a small town, and Smith, who is now mayor, began asking questions. Why did the city owe so much money? How was it going to pay its obligation? And why was such an important issue buried in a footnote instead of front and center in the city's budget?
"Most people don't read footnotes," Smith said.
Now, a lot of people are asking those questions all over California.
Thanks to a ruling from a board that oversees government accounting practices, the state, local governments and school districts will soon be forced to come clean about the cost of promises they have made to their employees over the years.
For the state government alone, those costs are now projected at more than $40 billion. The costs for counties, cities and schools will likely add tens of billions of dollars more to that tab.
The problem stems from the fact that many government employees are allowed to retire with full pension benefits in their 50s, years before the federal Medicare program kicks in for their health care. To cover them until they turn 65 and to fill some gaps in Medicare even after retirees are eligible for that program, governments have agreed to pay for insurance in retirement.
But unlike pension obligations, which are usually prepaid at the time the employee is working and earning his or her benefit, retiree health care has been treated as a "pay-as-you-go" item, with little or no money set aside to cover the future cost. That means taxpayers years from now will be on the hook to pay for the health care of today's employees when they retire, at the same time those taxpayers will also be paying the salaries and health care for an active work force that is providing services.
