Report Pegs California’s Unfunded Retiree Health Care Costs at $63.84B
The cost of public retiree health care over the next 30 years is expected to be $63.84 billion more than California has allocated to pay for it, according to a recent report from State Controller John Chiang (D), the Los Angeles Times'Â "PolitiCal"Â reports.
Chiang said that the cost of providing health care to retired public workers did not increase as fast as expected (Megerian, "PolitiCal," Los Angeles Times, 2/22).
However, the unfunded liability for retiree health care grew by $1.7 billion from the $62.1 billion obligation identified as of June 30, 2011, according to Chiang (Lake County News, 2/25).
California officials do not have a clear plan to cover future retiree health care costs, the Times reports. Chiang noted that California's financial situation makes it difficult to set aside funds to cover health care costs ("PolitiCal," Los Angeles Times, 2/22).
Implications and Recommendations
Chiang said, "The current pay-as-we-go model of funding retiree health benefits is short-sighted and a recipe for undermining the fiscal health of future generations of Californians."
He added, "However, today's challenge won't necessarily become tomorrow's crisis if policymakers can muster the fiscal discipline to invest now so that we can pay tens of billions of dollars less later" (Lake County News, 2/25).
A payment increase of $170 million could reduce the total unfunded liability by $2.74 billion, he said ("PolitiCal," Los Angeles Times, 2/22).
On Thursday, Capital Public Radio's "KXJZ News" reported on Chiang's report on public retiree health care obligations (Quinton, "KXJZ News," Capital Public Radio, 2/21).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.