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.

© 2013 WHEC

You may also like

The good, the bad and the ugly in Cuomo’s budget

“We are at the early stages of what shapes up as the biggest state and city fiscal crisis since the Great Depression,” said E.J. McMahon of the Empire Center. “Borrowing and short-term cuts aside, the budget doesn’t chart any clear path out of it.” Read More

Medicaid cuts make the state budget, with some tweaks

Bill Hammond, director of health policy at the conservative-leaning think tank the Empire Center, suggested this is because the proposed cuts are meant to slow the otherwise rapid growth in Medicaid spending, which means an increase is still possible.  Read More

Gov. Cuomo’s Lawsuit on Pres. Trump’s Tax Cuts Dismissed

But according to the Empire Center, a non-profit group based in Albany, the overall impact of the Trump tax cuts actually benefited most state residents. Read More

EDITORIAL: State schools continue spending more for less

As reported by the Empire Center last week, “The number of students enrolled in New York state public schools is the lowest recorded in 30 years.” Since 2000, enrollment in public schools has declined by more than 10 percent statewide with most of it upstate as enrollment in New York City schools has increased 1.3 percent in the last 10 years. Students are not leaving to go to private or parochial schools either because they, too, are showing declines, down about 8 percent in the last decade. Read More

$1 billion semiconductor plant: ‘Flashy mega-project’ or ‘transformational investment’ for New York?

"The state is continuing its strategy of pursuing flashy mega-projects instead of making New York more attractive for all businesses. We're now in the second decade of this approach, and it's still failing to deliver the promised results," Girardin said. "This is the sort of economic development strategy that politicians turn to when they don't want to take on the tougher questions." Read More

Cuomo blames lawmakers for plate fee set by his administration

The new replacement policy, which was tucked into a press release announcing new plate designs, has been criticized as a "revenue enhancer wrapped in a public relations ploy" by E.J. McMahon of the fiscally conservative Empire Center for Public Policy. Read More

New York license plate fee increase draws criticism

"The 'current' $25 fee was for an optional plate choice," said E.J. McMahon, research director at the Empire Center for Public Policy. "The new fee will be mandatory -- the first time ever.  This is a revenue grab under the guise of a PR stunt. Yes, the plates need replacement.  But they don’t cost $25 apiece to manufacture." Read More

Medicaid bungle cost state $102 million over 4 years

“A little series of mistakes in a program this big can add up to a lot of money in a hurry,” Hammond told The Post. “A quarter of a million dollars is a lot of money. It’s important that the auditors are looking at this and are pointing to things that could be fixed.” Read More