And so it begins: GOP controlled PA House cuts insurance benefits to retired employees

[Divernan]

I received the following "Memo" today from the Chief Clerk (the GOP Majority names the Chief Clerk) of the Pennsylvania House of Representatives.

TO: All Active Members
All Active Harrisburg and District Office Staff
Eligible Retired Members and Staff

FROM: Anthony Frank Barbush
Chief Clerk

DATE: January 31, 2011

SUBJECT: Health Care Benefits

_________________________________________________________________________________________________

The Bipartisan Management Committee has approved a requirement for all active and retired House members and employees who participate in health insurance benefits offered by the House to CONTRIBUTE 1% of their SALARY to help defray the cost of providing those benefits. Each of you will be furnished with additional written information giving the specifics of this new requirement, which will be phased in during 2011, beginning with current House members on or about July 1. There are no changes contemplated AT THIS TIME TO THE CURRENT BENEFIT PLAN itself. The proposed CONTRIBUTION will help the House to maintain important benefits for you and your families.

Implementation details of this change are still being worked out and you will have opportunities to learn more and to ask questions as implementation moves forward.
(End of Memo - emphasis/all caps added by me.)
__________________________________________________________________________________________________________________

First of all, for any nitpickers, I state that the benefits are cut because increasing the costs of coverage by One Per Cent, means we are getting less coverage for the amount we paid. And yes, I know it applies to others as well, but I do not know the terms of their present employment contracts.
Active employees have health insurance expenses deducted from their pay. Retirees receive varying levels of health insurance, depending upon their age and length of service, as part of their pension (which we contributed to while actively employed).

Second, I take offense at the use of the term "contribute", implying something is freely donated.

Third, use of the term "salary" is vague. Does it refer to the annual pension retirees receive, or their last salary before retiring?

Fourth, each individual's retirement package was determined by a contract of employment which calculated pension/insurance benefits based upon length of service, average annual income of the last three years of service, amount contributed by the employee and age at retirement. (For example, I receive only basic Blue Cross/Blue Shield and once I reached the age of 65, I had to name Medicare as my primary insurer, and the BC/BS became only a secondary insurer. If I had worked another 3 years, I would have gotten coverage for eyecare/glasses; and several more years would have gotten me dental coverage.) My point is that I had a contract with my employer binding both parties to the terms. One party is not legally entitled to arbitrarily change the terms of a contract.

Fifth, and most alarming, is use of the phrase "at this time" in the statement there are no changes contemplated AT THIS TIME to the current benefit plan itself.

I spoke with a House Democrat this afternoon and was told that at first this cut was supposed to be only for the "active members", i.e, currently serving Representatives. This was to give them PR talking points about cutting their own benefits - without touching their own salaries or their automatic, ANNUAL COLAs (Cost of Living Adjustments) every year. But the IRS informed the GOP leadership that all current employees/elected members and retired members/employees were considered one class by the IRS, so all had to be included in this change. The GOP controlled house is still trying to work out details to satisfy the IRS. I am hoping that the IRS takes the opportunity to look at the automatic, annual COLAs which the House and Senate voted only for currently serving elected Senators, Representatives and state Supreme Court Justices, and NOT for any retirees or other active employees. Seems to me that if we are all in one class for insurance purposes, we are also all in one class when it comes to COLAs. Retirees used to get token COLAs of maybe 2 percent once every 3 or 4 years. I retired 8 years ago and we have not gotten a single COLA in that time.

As a retired state attorney who drafted and reviewed language of legislation and regulations, I conclude that whomever drafted the above memo for the GOP was an incompetent lawyer or no lawyer at all. Par for the course for Pennsylvania Republicans. Just looked up the bio on the GOP Chief Clerk. He's a high school graduate who attended but never completed even an associate's degree at the local community college. He evidently is one of those insecure people who doesn't want anyone working for him to have more education than he does. No wonder the incorrect word choice and screwing things up with the IRS - at least he can use spell check!

[old mark]

1. K&R- I retired almost 4 years ago, and do not get state benefits other than a small pension...

I did not work long enough to be elegible for them, so I buy my own insurance...
We received ONE COLA in retirement benefits a few years ago...it was the ONLY ONE SINCE 1973 when PA state employees voted to unionize.
I worked for the state for 10 years to secure a small but reliable pension, and I am beginning to fear that is will soon disapear due to political bullshit.


mark

[JPZenger]

2. Keep it in perspective

As a private sector employee who pays $14,000 out of pocket for insurance for my wife and kids, and who pays $4,000 a year in co-payments and deductibles, and who has no dental or vision coverage, I find it hard to feel compassion for your having to pay ONE percent of the cost of your health insurance. Many many people have much much higher costs than me.

Also, in the private sector, Blue Cross group plans also often make employees shift over to a limited Blue Cross plan once they turn 65.

[Divernan]

3. I understand your perspective. I ask you to consider the following:

We aren't asked to pay the increase to BC/BS. We're asked to pay it to the House. And since it is termed a "voluntary" payment to the House, it is not tax deductible as a medical expense.

Further, as a single insured person, I will be billed one percent. But active employees, who like you may have SIX people insured on their policy, are also being billed only one percent. This policy is as regressive as a flat tax.

Active employees and their insured, for whom BC/BS is the primary employer, cost far more to BC/BS than we retired employees for whom Medicare is the primary (paying 80% after annual deductible) and BC/BS is only the secondary insurer(paying the remaining 20% after annual deductible). Again, it is flat tax regressive for the House to bill all insured, whether primary or secondary, the same fee.


The non-tax-paying, "non-profit" Blues are sitting on a surplus in this state of over 5 billion dollars. There has been no evidence offered as to what increases the Blues have or have not demanded from the House this year. If there is, I fully expect that it would be broken down between the actively employed, primary insured and the retired, secondary insured.

The whole concept of reneging on retirement contracts, albeit one percent at a time, without any financial specifics provided as justification, sets a bad policy precedent and needs some bright light shined on it. The House's approach has been slapdash, sloppy & screams of political game playing in anticipation of public outcry to the coming slashes to state services for the public. State legislator: "Oh, I feel your pain! Why I myself have to pay more for MY insurance." That one percent is absolutely de minimis to a legislator who rakes in far more each month in fat per diem payments (for expenses they couldn't document if forced to) than many state employees receive in their pension and social security combined.

Reminds me of those old Mickey Rooney movies where a bunch of kids say, "Hey, gang, let's put on a show! We can use the abandoned barn!" In other words, amateurish, unprofessional and unrealistic.

[JPZenger]

4. Not too much to ask - shared sacrifice

Remember that most private sector employees receive NO health insurance and no pension after they retire, and many don't even get health insurance while they work.

Like many companies, my employer stopped contributing to retirement plans this year, after past reductions. Like many private sector employees, my co-workers and I have had to take huge pay cuts.

Like most people, I'll be very lucky if I can retire at 67.

If the Blue Crosses have a huge surplus, they should have never done 20% plus rate increases, which many private sector employees had to pay.

I can understand that police and firefighters need some extra benefits, because no one wants to see a 65 year old man chasing criminals on the street or fighting fires. However, it is harder to feel sympathy for some public sector office workers who are able to collect generous retirement benefits and health insurance while they are younger.

However, a few minor givebacks to help close a $4 billion budget hole is not too much to ask, particularly when everyone's school taxes will be going up this year, and many important state programs will be slashed.

[Divernan]

5. You ignore my points.

It is not "shared sacrifice", if a single insured pays the same flat rate penalty as someone with 6 people on their policy. What I tried to point out to you is analagous to, say, increases in tuition for state colleges. If I enroll, I have to pay the increase. If you enroll yourself, your spouse and your four kids, would you expect to pay the increase for only one of this group of six?

If my state income or local school tax rates are increased, I can accept that. Yes, state and local governments have to make cutbacks. But they should be done in an impartial manner, and with appropriate public disclosure/transparency/hearings as to the need for specific increases. These unprecedented cuts are not made by a governing body to affect all residents equally. This cut is done in the House's capacity as an employer. According to my internal sources, it is being done as political PR by bunch of elected Republican hacks as political cover for their next election. They did not extend it to all pensioners because they needed the money - they are trying to do it because the IRS said that was the only way it could legally be done. Believe me, that 1% will not go into some magic pool which will reduce your school taxes. It will stay within the House internal budget.

In the end, it is not about me getting hit with a 1% reduction - it is the way in which it is done and the precedent it sets. If they get by with this, it could be another 1% or even more, year after year, and spread to other retired public employees. We have many elderly public pensioners in the state, including the widows of police and firemen, who are in their 70's and get as little as $400 in their pensions.

I'm sorry you have had to take pay cuts. I took a 60% pay cut to go to work for the state as a public servant, and pursue a legal career of public service and of which I could be proud. The only way I could afford to do that was the knowledge that at least I'd have a pension. I'm sorry your company stopped funding a pension. I'm sorry if your (and my) property/school taxes go up. But screwing over House retirees will not reduce our school taxes. You seem to feel that if you got screwed by your employer, it is fine for every one else to also get screwed. On the other hand, I'm sure you would not willingly give up your group health insurance coverage through your employer just because many American workers have no health insurance at all. I don't subscribe to the "If I can't afford to retire, nobody else should be allowed to either." philosophy.

When I visited the Nazi Sachsenhausen Concentration Camp outside of Berlin a couple of years ago, I saw this quote from a German Lutheran pastor, Martin Niemoller, there:

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.

When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.

When they came for the Jews,
I remained silent;
I wasn't a Jew.

When they came for me,
there was no one left to speak out.

So who do you choose to speak out for? Republican party hacks, or retired govt. employees?

[Divernan]

8. How dare you have it better than me?

(I'm adding this from a thread by SmileyRose

Edited on Sun Feb-20-11 10:03 AM by SmileyRose
I hear this an awful lot.

"I have to pay my own health care premiums. What makes union workers think they deserve full paid healthcare?"
"I'll never be able to retire. What makes union workers think they deserve a pension?"


Will someone please figure out how to explain to these bozos that union workers think EVERYONE deserves decent benefits and a retirement with dignity?

Will someone please figure out how to explain to these bozos that union workers have always fought for EVERYONE, not just themselves?

Will someone please figure out how to explain to these bozos that they should be next to the union guy fighting for better benefits?

[JPZenger]

6. OK Now

OK, now, take a breath.

You are really comparing paying 1% of your health care costs to the Holocaust?

[Divernan]

7. No. I've been trying to help you grasp some basic legal & ethical concepts,

And look beyond your own personal experience/disappointments to consider the larger implications of the precedents set by this action.
As I've written, and you have ignored, it's not about the 1%, it's about the implications of an employer not only being able to unilaterally, arbitrarily, ex post facto rewrite a contract, but do so in a manner which is more punitive to some employees than others. Here's another classic quote:
No man is an Island, entire of itself; every man is a piece of the Continent, a part of the main; if a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friends or of thine own were; any man's death diminishes me, because I am involved in Mankind; And therefore never send to know for whom the bell tolls; It tolls for thee.
John Donne, Meditation XVII
English clergyman & poet (1572 - 1631)
To explain this quote to you, hopefully preempting a glib reply, consider the 1% hit on all retired employees of the
Pennsylvania House as the "clod" in the above quote, and expansion of this tactic (if they get by with it this time)to similar actions by the GOP majority in the state legislature against larger segments of Pennsylvanians as a larger part of the main. And if this works in Pennsylvania, the GOP legislators in other states can try this tactic in their states as well. Right wing legislators are very active in ALEC, the American Legislative Exchange Council, which puts out newsletters and holds national conferences which share little gems just like this l% at a time concept.

The German Lutheran minister whom I quoted, did not expect another holocaust to occur. He was trying, and in your case failing, to explain to people the importance of taking a stand for others, even when one's own narrow self interest has not been immediately or directly affected. It's about the rule of law, and taking a stand on principle.