Some retired teachers may see health premiums spike

Richmond Register – 1/23/2018 (reprinted)

by Ronnie Ellis
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When Carla Breeding thought last summer about retiring as a public school administrator, she considered the financial needs of her two adoptive children, ages 13 and 15.

Breeding, 55, taught for 33 years, 27 of them in Kentucky, teaching special education at all three levels — elementary, middle and high school — before becoming an administrator.

She chose to become an administrator because she needed more income to raise two children. Even then, she spent half her income for day care. And she knew she’d need more than her retirement check when she stopped work.

“I was planning to go back to work to help my kids pay for college,” Breeding said, “but I didn’t think I might need to go back to work to pay for our health insurance.”

That’s because Breeding believed her health insurance for herself and her children would be there so long as she made the $260 a month premium payment.

But if state lawmakers enact the budget proposed by Gov. Matt Bevin, Breeding’s monthly health insurance premium will be more than $1,000 a month.

“When I made the decision to retire, I had never even heard that not having insurance was even a possibility,” she said. “Last night, I woke up in the middle of the night, hyperventilating, trying to think of what else I can do.”

Bevin’s budget proposal does not provide about $145 million requested by the Kentucky Teachers Retirement System to subsidize health insurance for teachers who retired since July 1, 2010, but who are not 65 when they qualify for Medicare coverage.

Bevin and his aides say the health insurance isn’t guaranteed by the so-called “inviolable contract,” statutory language guaranteeing certain benefits to state retirees.

Budget Director John Chilton told the two budget committees of the General Assembly Tuesday “there just isn’t enough money to go around” for all the programs and services normally paid for by the state.

Instead, the budget would appropriate $3.3 billion to the state’s poorly funded pension systems, including the one for teachers.

Teachers, however, didn’t think their health insurance subsidy was at risk. In 2010, the legislature passed what they called a “Shared Responsibility Plan” in which teachers, local school districts and the state agreed to pay more to ensure the continuation of the insurance for those retired teachers who aren’t yet age eligible for Medicare.

Tim Abrams, Executive Director of the Kentucky Retired Teachers Association, said there are presently 8,554 retired teachers who depend on the state’s help in paying for health insurance. If Bevin’s budget proposal is approved, Abrams said, most of them will pay an average of $500 a month or $6,000 a year more in health insurance premiums.

There are another 2,757 retired teachers who are relying on a spouse’s employer-provided health insurance, Abrams said. Should their spouse lose that insurance, they too would be affected by the change in Bevin’s budget proposal.

“That’s taking quite a bit out of a person’s income,” Abrams said. “These people may not fall under the inviolable contract, but they feel like they were made a political and moral promise. I think it becomes a moral issue.”

Breeding, the retired Hardin County teacher, agrees.

“It’s immoral and it’s unethical,” Breeding said. “It’s unfair to take away the insurance teachers were promised — especially at a time and situation when retired teachers have few options to obtain coverage.”

Breeding said she nonetheless “feels a little bit guilty” because she sees other attacks on education and she’s worried about their impact on the state’s children and their futures.

“That budget is an attack on education, and I don’t know why,” she said.

Breeding and Abrams said they and other retired teachers are contacting lawmakers to persuade them the cut in funding for health insurance causes an unfair burden on affected retirees. They are urging lawmakers to raise enough revenue to fund education and the pension systems — rather than cutting education for children or health coverage for retired teachers.

Some lawmakers this week said teachers should realize the governor’s budget fully funds pensions and the health insurance was never part of the inviolable contract.

That’s of little comfort to teachers now, Breeding said.

“When I made my decision to retire, it was based on all the pertinent information we had been given at the time,” she said.

At least one lawmaker understands — though he doesn’t yet know a solution.

First term Rep. Steve Riley, R-Glasgow, is a retired teacher and administrator who retired after July 1, 2010, but isn’t 65.

He receives health insurance through the legislature — “but that’s temporary. I’m concerned and I’m concerned for our teachers. We need to take care of our teachers.”

Ronnie Ellis writes for CNHI News Service and is based in Frankfort; follow him on Twitter @cnhifrankfort.

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