Schools Should Fund Retiree Health Benefits Annually
"[R]ising health care costs are putting pressure on school and college districts to reduce or eliminate health insurance for their retirees," Marty Hittelman, president of the California Federation of Teachers, writes in a San Francisco Chronicle opinion piece.
"One proposed solution," prefunding the cost of retiree health care benefits, "doesn't address the root of the problem and may make matters worse," Hittelman writes.
Hittleman writes that it "may sound reasonable, but there are two problems with prefunding." She noted that:
- The "actuarial projections upon which payments are based are highly speculative, depending on a number of ever-changing factors"; and
- "Setting aside large amounts of money now" would cause classroom programs and school employee salaries to "suffer."
"The best solution might be to continue funding school employee retirement health care on a pay-as-you-go basis, while seeking to control and reduce health care costs," Hittleman writes.
In fact, "pay-as-you-go has been working well" for the "overwhelming majority" of school districts "and should continue to do so," Hittelman writes.
According to Hittelman, the "best choice" for controlling and reducing health care costs "would be to legislate universal health care coverage," as proposed under SB 840 by Sen. Sheila Kuehl (D-Los Angeles) (Hittelman, San Francisco Chronicle, 8/9). 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.