KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Retirees Struggle To Retain Health Benefits

News outlets offer several articles on how retiree health care costs continue to be an issue for both industries and cities. 

The Wall Street Journal: Retired Coal Miners Fight To Retain Health Benefits
Chief Executive Bennett Hatfield reiterated that the company's bankruptcy filing last July stemmed from weak coal markets "coupled with increased costs and unsustainable legacy liabilities." He argued that Patriot's "labor and retiree benefit costs have risen to levels that simply cannot be sustained" amid shrinking demand for coal. Instead, Patriot would like to create a trust with a maximum of $300 million from future profit-sharing to fund some level of retiree health benefits, far below its current retiree health liability of $1.6 billion. Some industry experts say Patriot also needs to shed retiree coverage because the health plans make its overall labor costs far higher than those of its nonunion competitors (Maher, 3/17).

The Associated Press: Study: Cities Have $12.7B In Retiree Health Costs
Michigan cities and townships that provide health care for retired public workers face nearly $13 billion in unfunded costs, according to a report released Thursday, with half setting aside no money to cope with a bill gobbling up more of their budgets. The sobering study, released the same day an emergency financial manager was assigned to Detroit, shows the city is not alone in grappling with how to pay promised health benefits to retirees. More than 300 cities, townships and villages – home to two-thirds of state residents – face a combined $12.7 billion in unfunded liabilities in the next 30 years (Eggert, 3/16).

San Francisco Chronicle: S.F. Avoids Retirees' Health Care Issues
For politicians who get awfully riled up about exposed genitalia in the Castro or what to call our local airport, the good folks at City Hall sure do have a knack for looking the other way when it comes to matters of huge financial import. Take the city's $4.4 billion unfunded liability to pay for health care for its employees and retirees over the next 30 years. A new report from the Pew Charitable Trust crunched figures for the largest city in each of the country's 30 most populous metro regions for a look at how they're faring when it comes to affording the tab on their pension and retiree health care obligations (Knight, 3/16).

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