There's No School Retiree Health Benefit 'Entitlement'

According to Gongwer News, Gov. Rick Snyder will propose some $500 million annually of “pre-funding” for the optional health insurance benefits that are now provided to school retirees, all or most of which would come from taxpayers for the next 25 years.

Here is what voters need to know:

  • Unlike their monthly pension checks, the state has no legal obligation to provide these optional health benefits to future or even current school retirees. They are and have always been mere “politicians promises,” subject to change or elimination with a simple majority vote in the Legislature and the signature of the governor.
  • During the years they were employed, neither the retirees nor their employers (us) ever contributed a single dime for this benefit. After they stop working, taxpayers pick up the entire cost. Last year it was $795 million — money that could otherwise have gone for smaller class sizes, better roads, more police, or even something exotic like a tax cut.
  • The benefit is provided even though — just like the rest of us — at age 65 school employees are all eligible for Medicare, the federal health program that pays most of the health care bills for America’s senior citizens.

All this raises what should be obvious questions for state policymakers:

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  • Why are Michigan taxpayers being forced to provide an optional benefit that hardly anyone in the private sector gets? Especially to former school employees as young as 55, well below the normal retirement age.
  • Who decided this particular class of Michigan residents has an “entitlement” to stop working in their 50s and force their neighbors pick up the cost of their health insurance?
  • Why shouldn’t school employees — just like the rest of us — have to wait until age 65 to start collecting government health care benefits?

Aside from the obvious unfairness, no public policy goal is served by enabling hundreds of thousands of former school employees to collect an optional benefit for as long or longer than they spent on the job. Taxpayers shoulder this burden because politicians have and continue to serve a politically powerful special interest first.*

*Another headline from the same issue of Gongwer suggests why: "MEA (School Union) Targeting Vulnerable House Members With $300K Ad Buy." At the national level, since 1989 the combined campaign spending of the two largest teacher unions has exceeded the next highest spender by more than $10 million.


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