It is easy to take sides and even grow angry when the question of healthcare benefits is raised. We all have an opinion depending on our jobs, how much we have paid into various plans, and whether we have received quality care in times of need. We all start judging the system by how much it costs us but, the moment our own health fails or one of our family is at risk, the focus immediately shifts to the standard of actual care available. Indeed, as we age and feel ourselves slipping down the slope into the health “danger zone”, we all worry about what will happen should some serious disease strike. Looking around the US right now, we see the majority of states dealing with record deficits. Indeed, the situation is likely to get far worse before it gets better as there is no will to raise taxes while we remain on the edge of falling back into recession. So most states are looking for ways in which to cut back on spending. No more “big government”.
One obvious target in this is the health benefits of state and local government employees. The idea is to force employees to take on a bigger share of the costs of their health benefits. Connecticut, Kentucky and Texas have already pushed through cuts. But Michigan is facing legal challenges for its plan to deduct 3% from state employees’ gross pay. This will accumulate in a trust fund to pay approximately one-third of the health costs of retirees. There are also law suits in New Jersey challenging increases to the current deductions. The other states are watching with interest to see how this litigation plays out. Around the US, the total liability will be more than $550 billion for the healthcare and other non-pension benefits made available to retirees.