The group said its current health care benefits are vested and lifetime in nature that were negotiated by retirees in lieu of compensation.
“This action seeks to reduce health care related payments to retirees by more than 80 percent and would eliminate all health care benefits for the 8,000 retirees who are not eligible for Medicare, only providing them with $125 per month to purchase far inferior coverage,” said Terri L. Renshaw, chair of the committee. “Worse still, this payment is only for retirees. There is nothing for spouses or dependents.”
According to the group, for retirees who are Medicare eligible, “the city’s action is devastating as it doubles their out of pocket maximum expenses for medical care and increases prescription drug costs anywhere from 200% to 1,000%. The plan offers no coverage at all if someone is in the Medicare ‘donut hole,’ with prescription costs skyrocketing for those with any specialty prescription drug requirements.”
However, Orr’s spokesman, Bill Nowling, in a release sent out Tuesday evening, said the new arrangement is the latest in a series of city restructuring initiatives aimed at lowering benefit costs while ensuring employees and retirees have adequate access to health care.
Nowling said most active employees will see a decrease in their share of insurance premiums, but will pay higher deductibles and certain out of pocket maximums under the new structure. Retirees who are younger than 65 will receive a monthly stipend of either $125 or $200 with which to help purchase coverage from state health care insurance exchanges, or to pay for coverage provided by a new employer.
“This new health benefits structure allows the city to provide quality health care to its active employees. It also will provide retirees who are enrolled in Medicare with supplemental coverage, and it will help younger retirees who are not yet Medicare eligible to afford coverage until they are old enough to transition to Medicare,” Orr said. “Our goal has always been to provide quality coverage that the city can reasonably afford, and we have done that.”
The group said retirees who are Medicare eligible and who reside outside the state of Michigan will get hit even harder, with little choice, higher premiums and costs for prescription drugs potentially increasing 1,500% to 3,000%.
“The city’s actions were taken without court approval and were made over the objections of the Retiree Committee and others closely associated with the bankruptcy case who had been seeking a more humane, long-term solution to health care issues,” Renshaw said. “Higher costs, less coverage and huge increases in prescription drug payments are the key components of this plan. These reductions, coupled with the city’s threatened pension reductions, is draconian, inhumane and unprecedented. Exposing thousands of retirees on fixed and limited incomes to this burden is unacceptable and we will spend the days and weeks ahead fighting this plan.”
In an interview with the Michigan Chronicle, Brenda Goss Andrews, president of the Retired Detroit Police Members Association, said Detroit needs to put a face on the financial crisis in the city, to show how much suffering is about to be meted out on “people who have worked hard, earned their pensions.”
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