Protecting State Services From A Deficit
California is facing a deficit. To protect services, the state should make use of billions of federal dollars currently being left on the table. Unlike Colorado, Oregon and Washington, California still runs an insurance system for retired employees even though that became redundant after President Obama and Congress enacted the Affordable Care Act, which provides premium support to purchase health insurance. For example, a retired 55-year-old California prison guard with a family of four collecting $100,000 per year in pension could receive $1,900 per month in premium support:
But instead of accessing that money, the state is needlessly incurring $4 billion of annual retiree health expenses, most of which is paid in cash and the balance added to retiree health liabilities that now total nearly $100 billion. That’s why a retired public employee costs California eight times more than the same retiree costs Colorado, needlessly depressing public services, headcount and salaries and wasting state taxpayer dollars. To add insult to injury, by needlessly including retired employees in its insurance pool, the state is also needlessly increasing premiums for active employees.
As page 139 of the state’s Comprehensive Annual Financial Report makes clear, retiree health benefit terms can be amended by the Governor and Legislature. They should amend those terms to require full use of federal benefits before limited state subsidies are provided. Covered California makes it easy, both to access benefits and to arrange insurance coverage. The state should require the same of all subsidiaries, including local governments, schools, colleges, universities, transportation agencies and special districts that similarly are wasting state and local taxes and student and user fees.