Stopping medical coverage?

The hundreds of Nevada government workers who each year retire in their 50s or early 60s enjoy health coverage heavily subsidized by taxpayers. They pay little or nothing on premiums for themselves and their dependents. When they become eligible for Medicare, their primary health insurance converts to supplemental coverage — with taxpayers covering nearly all the premium costs.

Prior to 2003, retired government workers remained enrolled in the health plan run by their jurisdiction or agency — the plan that covered them as employees. But the 2003 Legislature decided government workers didn’t have it good enough, and that they needed another option in retirement.

A law was passed that allows retiring workers to choose between their own health coverage (a plan run by a city, county or school district, for example), and the state’s Public Employees’ Benefits Program, which offers a more generous subsidy. Moreover, if an employee decides to switch to the state plan, his prior employer must cover the cost of that bigger subsidy. For local governments, that means diverting revenue from their own health plans to support another. For the state program, it has meant a strong enough influx of retirees to raise concerns about the long-term stability of the program.

Lawmakers didn’t anticipate the fiscal ramifications of their law (a refrain common in Carson City), so in 2007 they moved to fix it. Senate Bill 544, passed nearly unanimously by both houses and signed into law by Gov. Jim Gibbons, will eliminate that choice effective Nov. 30, 2008. Government workers who retire after that date will have to stick with their old plan.

Public employees, predictably, are bristling at the fact that they soon won’t get to choose between a Cadillac and a Mercedes. In fact, some public employees are so mad they’re exaggerating the change to make it seem like they won’t get any taxpayer-provided health care in retirement at all.

“Legislation to stop medical coverage for those teachers who retire after September 2008 is in effect, forcing me to make the choice to retire now, rather than at the end of my 30 years,” one Clark County School District teacher wrote in a letter to the editor of the Review-Journal.

What a crock.

But give government workers their due: They know a great deal when they see one. Scores of teachers and county and municipal bureaucrats are considering gettin’ out while the gettin’s good. They’ve only got another year to cash in on the PEBP subsidy, then it’s gone for good.

“Anecdotally, there is evidence that some county employees are thinking of retiring earlier than they may have otherwise in order to benefit from the subsidy before it expires,” Clark County Comptroller Ed Finger wrote in a July 26 memo to county Chief Administrative Officer Don Burnette. “For 20-year employees, the subsidy provides PEBP health coverage at no or very little cost for retiree-only coverage, and at reduced rates for retiree plus spouse coverage, when compared to county premiums.”

Said state Sen. Bob Beers, R-Las Vegas: “This will be looked back on as the largest early retirement program in the history of the state.”

And those no longer in line to get their slice of pie won’t let the issue fade to black. They’re already angling to have the county and local governments commit to providing future retirees with subsidies that match what the state makes available now. Such a commitment would create huge new liabilities for taxpayers and retard the ability of governments to maintain services.

The only long-term remedy to this situation was proposed in 2005 by then-Gov. Kenny Guinn: eliminate all retirement health care subsidies for future public-sector hires. It’s brutally unfair to expect taxpayers to continue to pay for retirement benefits that are unavailable to them.

And public employees should stop complaining about the loss of a retirement option they never should have had in the first place.