Senate OKs cut in medical benefits for state retirees

BOISE – A proposal to slash medical benefits for state retirees cleared the Senate on Wednesday after a heated two-hour debate over obligations to the state’s aging work force.

The Senate voted 23-10 to cap medical benefits for current retirees and to eliminate medical retirement benefits for future hires.

The measure now goes to the House.

Critics said the plan would break long-held promises to state workers by leaving them without fallback health care coverage once they retire. They also said most retirees oppose the changes because state officials have not communicated the details effectively.

“Stop this action now and take a year to do this process properly,” said Sen. Dean Sagness, D-Pocatello. “I know there are retired employees virtually worried sick over this. What we are about to do to state employees is a travesty.”

Supporters say the measure will reduce the state’s $442 million unfunded medical liability, which is projected to rise to $800 million by 2016 under the current system. Under the bill, the liability would drop to $136 million over the next eight years.

“It is a situation that rises to the level of a crisis, and we can’t ignore that,” said Sen. Joe Stegner, R-Lewiston.

Sen. Dean Cameron, R-Rupert, said most state workers and retirees will likely support the changes once they learn what benefits will be provided.

“I believe that they will feel comfortable, they will feel peaceful, once they sit down and look at all the information,” Cameron said.

The plan would cap premium payments for current retirees who are 55 to 65 years old at about $1,800 a year and cut benefits when those retirees become eligible for Medicare at age 65.

Workers hired after June 30, 2008, wouldn’t be eligible for retirement medical benefits.

Mike Gwartney, director of the Department of Administration, introduced the plan in January on behalf of Gov. Butch Otter.

More than 3,000 retired state employees receive state medical benefits.