Washington State’s Retiree Benefits To Cost $12B by 2031

Health care subsidies for retired public employees could cost Washington state $12 billion over the next 25 years, according to a study completed to comply with new federal accounting regulations, the Seattle Times reports.

The state actuary's office said that if state and local governments wanted to begin paying for the future costs, they would have to start allotting more than $600 million annually. Most of the funding would go toward retired teachers and state workers.

However, the new federal accounting standards do not require states to begin paying the future costs, and Washington state officials said there is no advantage to paying them, the Times reports.

The current cost of providing benefits to retired Washington state public employees is about $129 million annually, with state workers accounting for nearly half of the annual bill.

Washington state offers public employees two medical benefits:

• Medicare-eligible retirees receive $164 per month in 2008 to purchase additional health coverage; and
• Retirees not yet eligible for Medicare can purchase health insurance at group rates, which saves each retiree about $263 per month.