Study Details Strategies for Reducing Deficit of San Diego Health Benefit
If San Diego eliminated its retiree health coverage benefit for current city employees, the city could reduce its $1.36 billion health care benefit deficit to $442 million, according to a recent study by Buck Consultants, the San Diego Union-Tribune reports.
In 1982, then-Mayor Pete Wilson (R) set up the health care benefit as part of an exchange for city employees who opted out of Social Security. The plan aimed to reduce city costs immediately and across the long term.
However, over the last three decades, San Diego has funded the program on a pay-as-you-go basis andÂ has not set aside funding for future use.
The study found that if San Diego's retiree health care benefit was capped at the current $8,880 annual payment, the deficit would be reduced to $969 million.
However, Buck Consultants noted that if the city takes no action, the deficit would increase to $1.4 billion and that the city would have to pay $123 million annually into the benefit.
Up for Vote in November
A proposal for increasing the city's sales tax by a half-cent would help address the health care benefit deficit.
However, if the proposal is approved by votersÂ on Nov. 2, revenue from the tax increase cannot be collected until city leaders implementÂ certain changes to city pensions and operationsÂ (Gustafson, San Diego Union-Tribune, 9/1).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.