Orange County Increases Retirees’ Health Care Costs
Orange County supervisors on Tuesday unanimously voted to approve new rates for retirees' medical coverage to address an unfunded liability of $1.4 billion for retiree health benefits, the Los Angeles Times reports.
The move could nearly double monthly premiums for some retirees, who said the decision was unfair because they had been promised affordable health coverage in retirement.
The reductions to retiree medical coverage are expected to cut the funding shortfall by about $815 million. The decision will split the coverage pool between retired and active employees, requiring retirees to pay an average of 34% more for health care.
About one-third of the county's 6,000 retirees are enrolled in HMOs and will see rate increases of between 72% and 95%, according to a county staff report. For some retirees, those rate increases could amount to $7,000 annually.
County Supervisor Bill Campbell said the rate increases were necessary to save the program, adding that the increases were preferable to ending retiree health benefits altogether.
County retirees are expected to challenge the decision in court (Berthelsen, Los Angeles Times, 8/15).