Public can't sustain retiree health costs

For municipal governments, full health coverage in retirement — for those employees lucky enough to get it — is one of those benefits, like generous fixed pensions, that grows harder every year to fund and justify. Today’s great life-extending and life-enhancing medical techniques, deemed necessary as a person ages, can be very expensive to any entity or individual, public or private, that bears the rising cost.

It has been widely known for a long time that something would need to give way regarding lifetime health coverage in public employment. That’s why, as a relatively modest measure, it’s a necessary first step that Nassau County’s new contract with Civil Service Employees Association Local 830 now includes the first-time requirement that only those in the bargaining unit employed by the county for a full 20 years earn this coveted benefit.

Up to this point, the vesting period for post-retirement health coverage has been only 10 years. Another change is that the workers will have a narrower choice of health plans to save on costs.

For most of the 3,800 employees covered by the contract, this concession by the union is far from draconian or unreasonable. It helps pay for a 13-year contract retroactive from Jan. 1, 2018 through Dec. 30, 2030. With salary hikes totaling 25%, and other improvements for the workforce, the pact is still estimated to cost county taxpayers $810 million.

That said, there is a relatively small number of CSEA members who are unfairly affected — in the sense that they may have made a prudent life-planning decision several years ago to forgo better-paying jobs just to retire after 10 years with health benefits. The new 20-year rule is something they had no way to anticipate. Perhaps some accommodation is possible for the 100 or so workers affected. But it must not seriously dent the agreed-on savings needed to offset the contract’s still-hefty cost.

New York City seems to have finally begun to confront its bigger, ballooning retirement health costs. Officials moved to change the options for retiree Medicare plans, in a bid to save hundreds of millions of dollars. But that switch, affecting thousands who have already retired, has been stopped in court due to a municipal law that says the benefits as promised under contract must be delivered. City retirees cannot argue against prospective cost reductions for future retirees — and they don’t. They simply insist they shouldn’t have been led to plan their lives on an empty promise that their Medicare deal would never change.

The momentum away from a huge perk — public employers covering lifetime health costs — has been a long time coming. This is one growing pain toward fiscal sustainability in an age when even the funding of long-established Social Security benefits poses an increasingly serious problem across the U.S. What is happening in Nassau County shows that the crunch can no longer be put off.