Retirees' health expenses eased

Planned increase lowered for former city workers

`Asking too much at one time'

October 02, 2003|By Laura Vozzella | Laura Vozzella,SUN STAFF

With retired city workers upset about a big jump in their health care costs, Baltimore officials decided yesterday to spend about $1.2 million a year to roll back a small portion of the increase.

"This is just asking too much at one time," Council President Sheila Dixon said. "People are trying to figure out how to survive with this increase."

Yesterday's action will save retirees $7.46 to $19.59 a month, depending on their insurance plans.

Retirees will still see their insurance costs climb, as the cash-strapped city shifts more of the health care burden to them. A family that chooses the CareFirst BlueCross BlueShield plan, for example, will pay about $400 a month, up from $241.

"I never imagined I'd be paying this much out of pocket when I retired," said Elaine White of Ashburton, a retired teacher whose monthly insurance costs will rise from $115 a month to $179.

"If I'd known that, I might still stay working" until age 65, when Medicare eligibility begins, said White, 57.

Faced with soaring health care costs and a tight budget, the city's Board of Estimates voted in February to increase what managers and retirees pay for insurance. City officials said at the time that the medical and prescription drug plans were far more generous than what private-sector employers provide.

The changes will take effect Jan. 1 and will have an impact on nearly 14,000 retired municipal workers and 6,000 retired teachers. Also paying more will be elected and appointed officials and high-level managers, including Mayor Martin O'Malley.

For many retirees, the higher costs have only recently hit home, as charts listing various plan rates have arrived at their homes. The period to enroll in the plans began yesterday.

The Board of Estimates decided in February that the city would provide a flat monthly subsidy of $172 to $418, with each employee picking up the rest of the premium.

A letter from the city human resources department to the board indicated that the city would cover 50 percent of the premium, with the employee paying the other half. That's up from the current 21 percent to 41 percent paid by retirees.

The board vote never committed to 50 percent, but that became a point of contention later, when BlueCross BlueShield rates were set higher than anticipated, causing the city's share to fall to 48 percent and the retirees' portion to climb to 52 percent. Already unhappy that their share of the premium was rising to 50 percent, retirees started to complain about the extra 2 percentage points, city officials said.

Members of the board discussed the retirees' complaints at a meeting yesterday morning and decided to find out if the city could absorb more of the cost.

"We'll sharpen our pencils and look at it and possibly make an adjustment," O'Malley said.

By afternoon, officials had decided that the city would cover 50 percent of the premium.

"There hasn't been any city employee or retiree who isn't going to feel the pain associated with these increased health care costs," said First Deputy Mayor Michael R. Enright. "And I think the mayor decided upon reflection that he could ease some of the pain for people on a fixed income by absorbing that 2 percent cost."

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