Detroit Retirees Say Health Care cuts “Inhumane”

FACT SHEET FOR CITY OF
DETROIT PROPOSED CHANGES
RETIREE HEALTH CARE BENEFITS
■ There are more than 20,000 retirees from the city of Detroit, who include police officers and firefighters, as well as the city’s many non-uniformed employees. Most of them retired between 1980 and 2000. Most live in Michigan, with approximately 7,500 still living in Detroit itself. Also affected by changes to the retiree health care benefits are the many spouses, dependents and survivors of retirees who depend on the city’s promised health care benefits.
■ The city’s new plan seeks to go into effect on January 1, 2014.
■ The plan will eliminate all healthcare benefits for the 8,000 Retirees who are not eligible for 
Medicare, except to provide them with $125 per month to purchase far-inferior coverage that could easily triple their share of healthcare expenses — or worse, depending on their circumstance — and require them to go out-of-pocket to pay premiums.
The Harm From The City’s Plan to Retirees Who are Not Medicare Eligible (Generally Those Under 65 Years of Age and Certain Uniformed Retirees)
■ Currently, the city contributes between $605 per month for a retiree and spouse not eligible for Medicare and $1,834 for a non-Medicare eligible family. Now, the retiree — and only the retiree — will receive a check for $125 per month. If a retiree was disabled in the line of duty, the check will be $200 per month.
■ These monthly checks will constitute income and thus be taxable to many Retirees.
■ The drop to $125 per retiree in city funding is insufficient to enable a retiree or a retiree and 
spouse — let alone a retiree and family — to procure comparable coverage on the health care exchanges without incurring significant out-of-pocket premium charges. Given that many such retirees and their spouses and families live on fixed and limited incomes, the economic impact will be significant and in many cases dire.
■ The health insurance the city contractually agreed to provide — promised to provide — and the retiree earned, as deferred compensation — has covered approximately 90% of the health care costs incurred. The city’s plan will eviscerate such coverage.
■ On the Affordable Care Act exchanges, a couple making $31,000 annually (twice the federal poverty level) would have to pay an additional $453 annually — above the city’s contribution and any federal subsidy.
■ For a couple who incurs an average amount of medical charges in a given year, this will result in an annual increase in out-of-pocket health care spending that could easily exceed $5,000 or more.
■ The new plan eliminates many retiree contributions to Medicare eligible Retirees, their spouses and dependents.
■ The city’s plan eliminates the city’s premium payments for all dental and eye care.
Detroit retirees say health care cuts ‘inhumane’