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The Takeaway: Public Employees Retiring Too Early?; Health Care’s Mixed-Up Future

Posted By Elizabeth Nolan Brown On December 12, 2011 @ 9:26 am In Bulletin Today | Comments Disabled

300-early-retirement-pensions-public-sector [1]Retirement age for public sector workers — government employees, teachers, firefighters, trash collectors — is becoming a topic of fierce friction nationwide. At a time when many in the private sector are wondering whether they’ll ever be able to retire, public employees still have the option of retiring relatively young, and all with the blessings of defined-benefit pension plans and guaranteed retiree health coverage. It’s a situation that can cause resentment among private sector workers — and one which critics say is unsustainable. Government employees, however, say it’s part of the package for public service.

After 20 years, most teachers are making $50,000 — woo-hoo,” said elementary instructional specialist Maureen Reedy (pictured above). “Our pension and our security are part of the long-range outlook of our profession.”

Typical retirement age in most public workers is 62-65. As of 2008, however, 75 percent of public retirement programs in this country offered some kind of early-retirement option, paying partial benefits for workers of a minimum age (usually 55). Public safety workers, such as police and firefighters, can often retire starting at age 50.

Meanwhile, the average older adult today could live well into his or her 70s, 80s or even 90s. Paying retirees’ pension and health care benefits for a span of 20, 30 or 40+ years just isn’t feasible, experts say. Cities, counties and states are already struggling to pay pension bills. An Associated Press survey earlier this year found states have a combined $690 billion in unfunded pension liabilities, plus $418 billion in retiree health care obligations.

In response, governments across the country are hiking minimum retirement ages for some public workers. Statewide laws have been signed in Rhode Island, Massachusetts, New Jersey, Illinois and Missouri. An initiative slated for California’s 2012 state ballot would increase the minimum retirement age to 65 for most public employees (including teachers) and 58 for public safety officers.

But some think the focus should be on the style of retirement benefits, not retirement age, per se. Matt Mayer, president of a conservative think tank in Ohio, thinks public pension systems should operate more like Social Security. “Frankly, I don’t have as much a concern about when (public employees) retire as I do about when they get access to the pension,” said Mayer. “I believe in the economic freedom of workers. If a teacher wants to retire at 55, fine. They just don’t get their pension until 65.”

Health Care in 2012: The Wall Street Journal is reporting on the confusing state of health care [2]in this reform-passage purgatory, while the 2010 health care law awaits Supreme Court consideration and the 2014 start date of the individual insurance mandate. In this uncertain and cost-conscious health care world, the lines between hospitals, insurance companies and doctors are blurring. “Hospitals are bulking up into huge systems, merging with one another and building extensive new doctor forces,” the WSJ notes.

My mother works for doctors who ran an independent medical practice for a few decades. For at least a decade, they operated out of a suburban hospital–which was recently bought up by a large health care system, a city-wide network of hospitals, primary care physicians and outpatient centers. The doctors joined up rather than move out. Being part of the bigger system has perks — updated patient record systems, better benefits for employees. But it also brings less flexibility and independence.

In general, hospital mergers seem to bring patients better health care integration but less choice. While systems are merging — and hospitals are exploring direct-payment approaches that cut out insurance middlemen — insurers are buying up health care providers and working out cooperative payment models, the WSJ reports.

Such shifts have been gathering force for a while, but the economic downturn has accelerated the push for efficiency. The federal legislation, which creates new health-insurance marketplaces and requires most people to carry coverage, may unleash additional demand for health care once it fully takes effect in 2014. Even if the Supreme Court unwinds part of the law, the changes occurring now aren’t likely to stop because the pressure to reduce the price of health coverage won’t go away.

The story goes on to profile five people [2]— a doctor, a hospital CEO, an insurance-company official, a human-resources executive and a patient — involved in health care on the verge of 2012.

Monday Quick Hits: 

  • Even when residents die from staff mistakes, or a building is crumbling, low-rated nursing homes in Michigan are rarely closed, reports the Detroit Free Press [5]; often, there’s no place else to send low-income, high-need residents.
  • The holidays can be a productive time for job-seekers.

Photo: Jay LaPrete/AP


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URLs in this post:

[1] Image: http://blog.aarp.org/wp-content/uploads/2011/12/300-early-retirement-pensions-public-sector.jpg

[2] is reporting on the confusing state of health care : http://online.wsj.com/article/SB10001424052970204319004577084553869990554.html

[3] tries to make sense of (and peace with): http://www.latimes.com/health/la-me-1211-lopez-dad-20111211,0,7448973.column

[4] San Francisco will become the first U.S. city: http://www.usatoday.com/money/economy/income/story/2011-12-12/San-Francisco-minimum-wage/51823748/1

[5] reports the Detroit Free Press: http://www.freep.com/article/20111212/FEATURES08/112120406/Closing-low-rated-nursing-homes-is-last-resort-for-Michigan-families

[6] is responsible for as many as 2,000 deaths, and thousands of hospitalizations: http://www.nytimes.com/2011/12/12/health/scandal-widens-over-french-weight-loss-drug-mediator.html

[7] a pilot program at California’s Valencia college teaches students to help older adults cope : http://www.latimes.com/health/la-me-senior-program-20111211,0,6554684.story

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