Chair Talk
August 2008
As of early August there has been no decision by the State as to the co-pay/deductible increases that had been proposed earlier this summer. Any changes have to be approved by the Civil Service Commission after an agreement between the Department of Management and Budget and Civil Service. The next scheduled Civil Service Commission meeting is in September. We have prepared a “position paper” detailing SERA’s concerns about the proposed increases. That paper will be distributed at the August 8 Coordinating Council meeting.
Based upon all the figures I have been given, the State is proposing to save about $59.5 million per year based on the changes in co-pays and deductibles they have proposed. The majority of savings will be borne by retirees ($37 million) as compared to active employees ($22.5 million).
If the State does not make any alterations in the health care increases that had been proposed earlier, retirees will be seeing an increase in out-of-pocket costs for deductibles and co-pays that have not been seen before. If the proposed changes go into effect retirees will see an average increase of well over $500 per year. This increase will be much more than the $300 increase in their pension that many, but not all retirees receive in October of each year. I have attached to this report 2 tables that compare retiree/active average share of projected cost savings. I have used the figures the State has provided as to projected savings and the numbers of active employees and retirees. I have taken the liberty of using an average amount for each retiree/employee but the actual amount varies based upon your own health care situation. As you can see by comparing the tables, the average annual out-of-pocket increase for a retiree is $582.30 and for an active employee it is $325.04. Using those figures, a retiree will pay an average of $257.26 more than an active employee for deductibles/co-pays.
We will continue to actively pursue alternatives to these proposed increases. I believe we must continue to do whatever we can to protect retirees and their benefits!
We will be discussing what our next steps should be at the August 8 CC meeting.
Editor’s note: Bob Kopasz is Chair of the Michigan SERA Council. He may be reached at P.O. Box 692, Mt. Morris, MI 48458; phone 810/240-8380
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