Retired public employees will have to pay more for their health care starting in January 2022 following a 9-2 vote Wednesday by the Ohio Public Employees Retirement System board. “The basic problem is we have no money to fund health care,” OPERS Executive Director Karen Carraher said. The health care trust fund, which is separate from the pension fund, will last 11 years with no additional funding. But OPERS’ analysts estimate it will be at least 15 years before the pension fund can resume setting aside money for the health fund. “So, obviously, the math doesn’t work,” Carraher said.
The goal, she said, is to keep the health care trust fund solvent, and that means cutting health benefits for its 304,000 workers when they retire and 213,000 current retirees. Here’s what that looks like: The monthly allowance paid to retirees who are Medicare eligible will drop from between $225 and $405 per month to a range of $178 to $315 per month. Some retirees will get bigger cuts than others, depending on how many years they worked and their age at retirement. People who worked fewer than 20 years (the current number required to retire with health benefits) will see their monthly payments decline by $108 on average.
Dental insurance and Medicare Part A payments will remain the same. The other major change was to eliminate the health care plan for retirees who aren’t Medicare eligible. Instead of paying 51% to 90% of their premiums, OPERS plans to give these retirees money to go buy insurance on the individual market. These hits will be bigger. “Low service employees” will lose $329 per month on average, and everyone on the plan could see higher deductibles. The market average is about $1,100 more than what OPERS’ offers now. And this new system will be more complicated to navigate, OPERS officer Tonya Brown said. Federal subsidies will be a better choice for some folks, and retirees can’t take both.
Tim Steitz, who also represents retirees, voted no. Steitz said he couldn’t support making these reductions in benefits when the board is also trying to persuade state lawmakers to freeze cost-of-living adjustments. Both changes would take effect in January 2022. “Why don’t we look at every solution and not put this only on retirees’ backs?” Steitz said after the vote.