Letter to Senator Schumer, Senator Gillibrand and Entire NYS Congressional Delegation

December 4, 2009

 

Honorable Charles E. Schumer

U. S. Senate

313 Hart Senate Building

Washington, DC 20510

 

Dear Senator Schumer:

 

              On behalf of the 40,000 members of the Retired Public Employees Association (RPEA), I am writing to express our concerns with regard to the Health Care Reform legislation being considered by both the Senate and House of Representatives.

 

              Our members retired from government at the New York State or local level and earned their pensions and health insurance benefits in public service, often foregoing higher salaries in return for these future forms of remuneration.  RPEA and its members recognize the need for national reform as retirees living on fixed incomes bear the disproportionate burden of ever-rising health insurance premiums and required co-payments.  In addition, there are many local governments that do not offer health insurance coverage to either active or retired employees.

 

              Moreover, all State and local retirees enrolled in the New York State Health Insurance Plan (NYSHIP) as well as many retirees in local health plans are required to enroll in Medicare as their primary insurer when they become eligible.  Since NYSHIP also provides for drug coverage, Medicare Part D makes payments to this system to offset some of the cost of prescription drug coverage.

 

              Public Employee Retirees, as with most other retirees, are in the unique position of living on fixed incomes.  Even though our benefits are provided by governmental entities, we must be distinguished from active public employees who can collectively bargain and negotiate salary and benefit increases to offset higher health care and insurance costs.  This requires special recognition and a degree of protection from direct or indirect cost increases to our benefits.  In essence, our income is highly leveraged.

 

              National health care reform is a worthwhile goal as it will benefit those of our retired public employee (as well as privately employed) brethren who do not receive health care insurance in retirement. However, we are concerned that if there are higher premiums and taxes and assessments on those who are currently enrolled in health care plans, they may fall disproportionately heavier on retirees who have no way of offsetting these costs other than by reducing their current standard of living.

 

              We therefore feel it is absolutely necessary that Section 1102 in the Senate substitute amendment to H.R. 3590 which parallels a similar provision, Section 111, in the House passed bill (H.R.3962) be included in any final bill. It creates and funds a reinsurance program for the cost of health care benefits for early retirees (ages 55-64).

 

              Another principle that RPEA supports is a provision contained in Section 110 of the House bill (H.R.3962) which prohibits employers from reducing retiree health benefits below what was offered to retirees at the time of their retirements unless reductions are also made to active workers’ health benefits.  Unfortunately, this provision only applies to private employers who are covered by the Employee Retirement Income Security Act of 1974 (ERISA).  RPEA strongly urges that this provision be made applicable to all governmental entities and be made part of any federal health care reform bill that emerges for final passage.

 

              This prohibition against reduction in public retiree benefits below those of active employees guards against unilateral diminishment of retiree health benefits when government budgets need to be cut.  Because of collective bargaining principles, active employee benefits cannot be touched without negotiation, but retirees are not protected by collective bargaining statutes and desperately need this federal statutory protection.

 

              Finally, in addressing Medicare reform Congress should recognize that State programs that provide health benefits to retirees, such as NYSHIP, need to continue to receive subsidies for Part D drug coverage that it saves the Medicare program by administering and providing prescription drug coverage for public retirees.  That would ensure that public employee retirees are not added to an already overburden federal health care program that is nobly trying to provide expanded coverage.

 

              We at RPEA thank you sincerely for your efforts in crafting this most difficult reform and in wishing you the best of success in this endeavor knowing that the public interest will be enhanced by your actions.

 

                                                                                                  Sincerely yours,

 

 

 

                                                                                                  Stanley Winter

                                                                                                  President