Pew Study: States Have Budgeted for Only 5% of Retiree Health Benefits
While states have promised $600 billion in retiree health benefits for public employees, they have allocated only about $31 billion, or 5%, of the total costs,Â according to a study released Tuesday by the Pew Charitable Trusts, CQ HealthBeat reports. In 2008, states had $587 billion in liabilities and $32 billion in assets, the study noted.
For fiscal year 2009, the study found an estimated $1.26 trillion gap between promises for public employees' retirement benefits, including $635 billion in unfunded health care costs and $660 billion in pension shortfalls (Reichard, CQ HealthBeat, 4/26).
The report found that California owed $490.6 billion in total pension liabilities in FY 2009, but had assets worth about 81% of that amount (Wills, AP/San Luis Obispo Tribune, 4/25).
Other State Findings
Nineteen states had no money budgeted for retiree health benefits in 2009, according to the report.
States have paid 36% of the $47 billion required by their own actuaries, while five states -- Alaska, Arizona, North Dakota, Utah and Washington -- have made full contributions, the study found. Alaska and Ohio accounted for nearly 62% of all the funds for retiree health care in fiscal year 2009.
The study warned that "the future fiscal burden could be enormous if more savings are not set aside or costs are not better managed" (CQ HealthBeat, 4/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.