From California Healthline, 1.22.15
When he took office as California's new treasurer this month, John Chiang (D) issued a warning about rising health care costs for retired state workers:
"If we continue to do nothing, we will be sowing the seeds of a future crisis," Chiang said. "The price tag associated with providing health care to retired state workers has quietly grown to rival or even eclipse the funding gap associated with public pensions."
In an op-ed in the Sacramento Bee, Chiang urged state leaders to act now to avert problems later. Chiang also recommended significant increases to the state's contributions to an investment fund for retiree health care costs.
Gov. Jerry Brown (D) recommended that state retirees pay more for health coverage.
We asked politicians, academics and consumer advocates how California should pay for the rising costs of providing health coverage for retired state workers.
California Healthline received responses from:
- Gerald Kominski | Director, UCLA Center for Health Policy Research
Empathy, Shared Sacrifice Required
Gov. Brown deserves credit for finally calling attention to an issue that in hindsight should have been addressed a decade ago: the impact of retiree health benefits. There is no magic bullet here, no easy solution. - Donna Lum | Deputy Executive Officer, Customer Services and Support, CalPERS
Pre-funding Trust Fund May Be Best Solution
CalPERS has been dealing with the rising costs of health care, including for our retirees, since we first began providing health coverage to CalPERS members in 1962. As the cost of health care increased, and as the Governmental Accounting Standards Board (GASB) changed the accounting standards, the liabilities associated with these benefits moved front and center. - State Sen. Ed Hernandez (D-West Covina) | Chair, Senate Committee on Health
Time to Get Serious About Cost Reduction
While reports indicate that health care costs are increasing at a slower pace in recent years, they still account for more than 17% of the U.S. gross domestic product and continue to consume significantly large percentages of federal, state and personal budgets.
- State Sen. Janet Nguyen (R-Garden Grove) | Vice chair, Senate Committee on Health
Retiree System Needs Overhaul
One of the state's top priorities this year should be to address a looming financial crisis in state retiree health care. If left unchecked, the costs associated with this obligation will significantly impact future state budgets and California taxpayers, as well as every retired state worker.
- Jamie Court | President, Consumer Watchdog
CalPERS Could Be Core of New 'Public Option'
The rising cost of health insurance for the state's retired workers demands innovative solutions, not simply throwing more money at the problem. CalPERS' economy of scale and bulk purchasing power can be harnessed and built upon to create big savings for the state and the entire health care system.
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