Waves of retired teachers once covered by their districts’ health plans are opting to get insurance through the state’s less expensive policy.
If Gov. Dannel P. Malloy has his way, his budget will slow this migration by increasing the cost the state’s 32,000 retired teachers and spouses would pay to join the state’s health plan. Almost two-thirds of the state’s retired teachers get insurance through the state.
Malloy wants to reduce the state’s share of an individual teacher’s health care from one-third to one-quarter, saving the state $7.5 million a year.
“This will encourage them to stick with their local [health] plans,” said Ben Barnes, the administration’s budget chief. “The state is not in a position to be the insurer of last resort for this many people that were never state employees.”
Over the past four years, nearly 3,100 retired teachers have dropped out of their local health plans to join the state plan, according to the Office of Policy and Management. This has led to a 32 percent spike in enrollment in the state’s plan and millions in increased costs for the state.
But for retirees like Janess Coffina, who taught in Stamford and Greenwich public schools, she is counting on the state plan to be her refuge when she turns 65 so she can abandon the skyrocketing costs her districts charge for health insurance.
“I know times are tight for everyone, individuals and governments alike. I just shake my head at how Connecticut teachers as a group seem to be on the wrong end of the stick in retiree benefits,” the retired Spanish teacher wrote in a newsletter to her colleagues of the $915 she pays a month for health care.
Barnes and the lobbyist for the Connecticut Association of Retired Teachers said districts across the state are purposely directing their retirees to enroll in the state’s plan, a move that can save municipalities millions each year. When a retired teacher joins the state’s plan, districts shed all financial responsibility.
“They’re getting them off their tab,” said Randy Collins, who represents the state’s retired teachers at the state Capitol.
Plausible solution?
Retired teachers say they doubt that this increase will lead to fewer retirees signing up for the state’s health plan.
The $47 a month proposed increase to $226 a month for a retiree still has the state’s plan costing significantly less than local coverage.
For example, in Greenwich the cost is $915 a month. And in other Fairfield County districts, the cost is easily $800 a month for retirees, Collins said.
“When you consider what I’m paying now (for local coverage), this will absolutely not convince me from enrolling (in the state’s plan),” Coffina said during an interview. She spends one-quarter of her pension on health care.
Barnes said Stamford is one of the main culprits in this influx of teachers switching to state coverage. A Stamford official Wednesday acknowledged that their retirees do have incentives to move to the state’s plan.
“We don’t give any incentives, the incentives are already there,” said Meryl Meitelen, an official in the city school district’s benefits department.
“It’s up to them, they have a choice. If they want to leave, they can, it’s going to be cheaper for them to do that,” she said. The state’s plan also covers hearing and vision and covers much more dental than Stamford.
Officials from the Teachers’ Retirement Board, which administers the state’s health plan for teachers, have been unavailable since this proposed increase was announced last week. It is unclear where the 3,100 retired teachers who joined the state’s plan had been teaching. It is also unclear if this proposed state increase will somewhat equalize the costs of state and local premiums.
Regardless if the increase slows the pace of teachers enrolling in the state’s plan, the president of the retired teachers group says this change will have a huge impact on the 19,000 retired teachers already on the state’s plan.
“This is getting to be extremely expensive,” said Michael Norman, a retired teacher from Manchester. “So many teachers are already making the decision between food and medication. This isn’t going to help that.”
Barnes said he is confident the changes will not limit retired teachers from getting insurance.
“It’s still very competitive with other plans,” he said.
This health plan has been on a fiscal roller coaster the last several years. The Democratic controlled General Assembly and former Gov. M. Jodi Rell deferred paying the state’s $30 million annual share for two consecutive years.
Last year, Malloy fully funded the health plan, and did not ask retired teachers to chip in more, despite the “shared sacrifice” mantra he said was needed to close a historic budget gap.
This year they weren’t so lucky, as Malloy needed to find $330 million in new money for his education initiative, his state employee pension initiatives and his small rate increases for nonprofit service providers.
“This is not acceptable,” said Collins of the state increase. “The state should have been raising their share not decreasing it.”
The retired teachers also suggest that the state consider increasing the $34 a month it gives municipalities for each retiree they cover. Instead, Malloy’s proposed budget would send $7 less each month for every retiree in a move to save the state $2 million.
“I would like to see the state encourage towns to do the right thing. This isn’t doing that,” Coffina said.