New York State Exposed: Lifetime health benefits

by E.J. McMahon |  | WHEC - Rochester

What if you could get coverage that was nearly free after you retire? If you’re a public employee in New York you can. But right now, experts warn it could be too much for taxpayers to bear. It’s an issue we’re uncovering in tonight’s New York State Exposed report.   

It may be one of the biggest and most expensive perks public employees in New York get — lifetime health benefits.

Government workers need only put in 10 years on the job before they become eligible for health care coverage for life. For some, that could be decades of coverage almost completely funded by you the taxpayer.

For the majority of people in the private sector, retirement means finding your own health care. Is that fair?

Kathy Miller of Caledonia said, “People are living longer and that’s what’s really draining things right now because people are living so long and they have sometimes 30 years once they retire and we’re paying for that? That’s a lot.”

It’s a perk that government workers in New York get that you probably don’t – lifetime retiree health benefits almost completely funded by you, the taxpayer.  

Nick Lisena of Brighton is enjoying his retirement. For 27 years he worked at a private engineering firm but when he left the workforce, his health care was cut off. “When I retired, my office said that’s it, you got to take care of yourself and that’s what I’ve been doing.”

That’s the case with most people who retire from the private sector but had Lisena worked as a public employee in New York State, his health care would have been covered after retirement for the rest of his life with about 90-percent of the premiums paid by taxpayers. “They should pay more into the system. They’re getting the system the rest of their life. I didn’t get it the rest of my life.”

Now a study by the Empire Center for New York State Policy says the burden of retiree health care is heading the state into a financial iceberg.                  

EJ McMahon said, “What that problem is is that our state and local governments and public authorities have promised all their current employees and their retirees that they’re going to offer them continuing health insurance coverage for the rest of their lives and we haven’t put aside a dime to pay for it.” McMahon authored the study and says the current set up is unsustainable.

Based on a review of financial reports, McMahon estimates the state’s liability for public sector health insurance comes to a staggering quarter-of-a-trillion dollars. “What it’s doing in that case is it’s spending dollars from today’s taxpayers to pay for a benefit that was promised to people who last worked five, 10, 15 or 20 years ago.” 

In most cases, public employees need only put in 10 years on the job before they become eligible for lifetime health coverage. It’s a perk retired government employees say they’ve earned, a promise made to them when they chose public service.

“I think it’s fair myself.” Tyrone Franklin is a former state employee. He retired from the Rochester Psychiatric Center after spending more than 37 years there as a cook. “We were given that promise and I think the promise should be upheld.”

McMahon said, “It’s one thing to say you’ve earned it but how much have you earned when your employer hasn’t put aside anything to pay for it. It’s an empty promise.”

Public employees are also promised pensions but unlike pensions, retiree health care is not guaranteed by the state constitution, meaning lawmakers could restructure the benefit.

But Assemblyman Bill Nojay says that’s easier said than done. “The problem is they’ve all gotta be negotiated with the state labor unions and that requires an act of tremendous political courage on behalf of the governor and the other people involved with the negotiations.”

The Governor’s Office declined to comment for this story.

Right now, Nojay says no one in the legislature is tackling the issue.   

Brett Davidsen: “Well, you’re a state lawmaker. What can you do about it?”

Bill Nojay: “I think what all the state lawmakers have to do is pull their heads out of the sand and say look, you can’t kick the can down the road for another 10 years or 20 years or 30 years.”

McMahon does not suggest the benefits should be stripped from employees but does suggest some solutions to make sure it is funded so the benefit will be there in the future.

He says the state should consider taking these steps:

– Preserve health benefits for employees who have already retired but require them to pay a larger share of their premiums

– Reserve the greatest benefit for those who have worked the longest

– Eliminate retiree health insurance coverage for all new hires and shift them into a retirement medical trust

News10NBC’s Brett Davidsen will be talking your questions on this story on his Facebook page tonight between 5:00 p.m. to 7:00p.m.

Click here to read CSEA’s response. To read the report, click here.

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