Retired Teachers Struggle to Keep Basic Health Care in CT

Photo by Old Shoe Woman

There are a lot of crazy, irresponsible and down-right mean things in Governor Malloy's budget proposal, but his plan to totally eliminate Connecticut's contribution to the retired teachers' health insurance fund may very well take the cake.

For nearly 60 years, the State of Connecticut has been helping retired teachers acquire health insurance. Prior to 1986, active teachers did not pay into the Federal Medicare system, so when they retired, they didn't qualify for Medicare, the primary health insurance system for older Americans. Furthermore, since teacher salaries were historically so low prior to the educational enhancement act of 1986, older teachers were retiring with very small pensions. With no Medicare and limited incomes, few could afford the most basic level of health insurance coverage without some type of subsidy.

For nearly four decades, the State of Connecticut utilized a variety of different mechanisms to help these older, retired teachers get some type of health insurance. In 1991 it settled on the creation of the Retired Teachers Health Insurance Fund. To fund the program, active teachers contribute 1.2 percent of their income into the health fund. This year that amounts to about $45 million. The premiums that retired teachers pay for their insurance brings in about $37 million. And state law required that the State of Connecticut contribute 33 percent of the cost of a Medicare supplement plan into the Insurance Fund.

Together these funds were used to help retired teachers get health insurance through the Teacher's Retirement Board or through their last employing board of education. The subsidy isn't much, only $110 per month, and despite the massive increase in health insurance premium costs, the subsidy hasn't been increased since 2000. The Teachers Retirement Board has determined that the $110 subsidy "now covers on average" only 14 percent of the monthly premium for the retiree, further eroding the value of the retiree's pension.

But as bad as things have become, even the $110 helped a little as these retired teachers were forced to shell out of their own pockets an additional $500 to $900 a month to buy insurance through their former boards of education. For good or for bad, the present system has been functioning fairly well.

And then to balance the state budget in Fiscal year 2010 and 2011, Governor Rell and the Democrats decided to insert language that allowed the state to forgo any contribution for two years. The lack of funding created a situation that began to derail the financial stability of the Retired Teachers Health Insurance Fund.

When Governor Malloy was sworn in, rather than recommit the state to the appropriate level of funding, he proposed shifting the burden onto the backs of the retired teachers. The Legislature rightfully rejected the move, but "compromised" by agreeing to only allocate 25 percent of the value of a Medicare supplement plan rather than the 33 percent required by the law.

While the state did deposit $35 million in Fiscal Year 2012 and $18 million in Fiscal Year 2013, by refusing to deposit the appropriate amount the Fund was, yet again, undermined.

And then came this year...Malloy went for broke and proposed simply making no payments whatsoever into the fund. This Governor, who ran on a platform of fiscal responsibility, proposed that the state simply forgo putting $70 million into the Retired Teachers Health Insurance Fund.


Here are the facts;

  • In 2012 the Teacher Retirement Board health plan was serving 18,804 retired teachers.
  • In 2012, the Teacher Retirement Board was also paying the town subsidy on behalf of 16,725 retired teachers.
  • The average age of the retired teacher on the Teacher Retirement Board's plan is 75 years old.
  • These teachers received a $0 cost of living adjustment in their pensions in 2010 and 2011.

The Governor's plan is simply outrageous.

Cross post from Jon Pelto's Wait What?

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