Local governments take budget knife to retiree health plans

Source: Reuters

(Reuters) - As cash-strapped U.S. cities and states struggle to address gaping budget holes, a long-honored benefit for public-sector workers has come into the cross-hairs of budget cutters: retiree health insurance.

A growing number of states and cities are eliminating or reducing health coverage for retirees, a benefit that has long fallen by the wayside for most private-sector workers.

But the coverage, which has meant that most retired public workers have all their medical bills fully paid, is expensive and hugely underfunded. And because health coverage does not typically have the strong legal protections that hamstring changes to public pension benefits, it is easier for governments to scale back.

The trend could leave millions of public workers with thousands of dollars in unanticipated healthcare costs.



Read more: http://health.yahoo.net/news/s/nm/local-governments-take-budget-knife-to-retiree-health-plans

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I can't help but wonder what will become of these retirees since many are not eligible to Medicare either because they didn't pay in or are not old enough.