An expensive promise

OLYMPIA – When Newport Police Chief Bill Clark abruptly retired four years ago, city officials rushed out shopping.

But not for a simple plaque or commemorative watch. Instead, the city suddenly found itself in the market for long-term care insurance, to shield its budget from potentially huge bills if the chief someday landed in a nursing home.

Across the state, thousands of mostly retired police and firefighters are eligible for medical benefits that the vast majority of today’s workers can only envy: free lifelong coverage of anything deemed “necessary medical services.”

“It’s the Cadillac of medical plans,” said Jim Justin, a lobbyist for the Association of Washington Cities.

And who decides what’s medically necessary? Dozens of autonomous local boards. On each, nearly half the voting members are enrolled in the same retirement system.

Picking up the tab in most cases: taxpayers.

Spokane taxpayers, for example, have in recent years paid for the following for retired police officers:

“ Penile implants for impotence.

“ Viagra and other anti-impotence drugs.

“ A $1,700 mattress.

“ Two “stair gliders” ($4,340 and $7,161) to carry people up stairs.

“ A $12,985 non-emergency flight to bring an ill retiree to Spokane.

But those items are chump change compared to the estimated $1 billion in medical costs that taxpayers will shoulder for the system’s roughly 9,000 Law Enforcement Officer and Fire Fighters Plan 1 retirees statewide. (The LEOFF-1 system – pronounced “Leff” – was replaced by a more modest retirement plan in 1977. The nickname for the newer plan: “Left Out.”) The retirees are covered by dozens of counties, cities, fire districts and a handful of port districts.

“I think we created a monster when we created this (LEOFF-1) system,” said Skamania County Commissioner – and LEOFF-1 retiree – Paul Pearce. “I think you’re going to see the counties and cities banging on the Legislature’s door, saying ‘You created a pension system and it’s bankrupting us.’ “

“What we’re very nervous about is medium-to-smaller cities,” said Justin, particularly with long-term care commonly costing $4,000 to $5,000 per month. “If you get two retirees in a nursing home, you may have to take a cop off the street.”

An expensive ‘footnote’

Adding to those concerns: new accounting rules that will soon require local governments to include future retiree medical costs on their balance sheets. Many worry that it will hurt their bond ratings – and stun taxpayers.

“Up to this point, that liability has sort of been recognized as a footnote on an annual report,” said Robert Baker, senior research analyst at the state actuary’s office.

Massive future bills for retiring civil servants are a nationwide problem. USA Today recently pegged the total tab at about $1 trillion, and called “the surprise bill” the biggest long-term challenge facing state and local governments.

“We see this as a problem with overpromising,” Washington Policy Center research director Paul Guppy said of the LEOFF-1 plan. “I’m sure that when this was passed, it looked like just a great idea at the time.”

Many LEOFF-1 members agree that their plan is top-notch.

“You find another system that offers full medical for life,” said Pearce. “I mean, think about it. Wouldn’t we all love to have that?”

“Everything you’ll ever need is there, except routine dental care,” agreed former King County police officer Lynda Ring-Erickson. (And some local boards, including the one for Spokane police, have now added dental coverage.)

But that was the point, Ring-Erickson and other LEOFF-1 retirees say. Generous retirement medical coverage was a key perk that kept cops on the street and fire crews at the ready back when salaries were more modest than today.

“People forget what Washington was like in ‘69 and ‘70,” she said. “As Boeing started to come back, many of us could have left and gone to work for Boeing for double or triple the pay.”

“They made that promise to us. I took them at their word,” said Chattaroy’s Bob Webb, a longtime Spokane police officer.

Like most retirees, Webb signed up for Medicare coverage – a move that will save local governments millions of dollars. He thinks it’s only fair that the city pick up the $88-a-month cost of Medicare Part B. After all, he says, it’s nearly $1,000 a year that he never thought he’d have to pay.

‘And now it’s time’

Many LEOFF-1 members say that local governments looking to blame someone for the looming big medical bills should look in the mirror. Decades ago, they say, cities, counties and other jurisdictions were given taxing authority to raise cash and set it aside for these costs.

In a few cases, they did. In Spokane, the city has more than $15 million in a fund to pay the future medical costs of the city’s roughly 290 LEOFF-1 firefighters.

But there’s no similar fund for the city’s 235 LEOFF-1 police. And actuaries predict that their health costs will total about $90 million.

“That’s a scary number,” said city retirement director Leo Griffin.

“I kind of feel sorry for the city at times. They do have an obligation here,” said Gary Gow, a LEOFF-1 retiree and longtime member of the Spokane Police Relief and Pension Board. “And the little counties, like Ferry, Pend Oreille and Stevens, it really knocks the hell out of them sometimes.” But local governments should have seen this day coming, he said.

“They had funding mechanisms since 1970 and they chose not to prepare,” said Mike Rose, a member of Spokane’s firefighters’ disability board. “They didn’t set the money aside. And now it’s time.”

State lawmakers have taken a couple of runs at trying to help. Several years ago, Senate budget writers floated the idea of tapping what was then a large surplus in the fund that pays pension checks. Why not tap some of that extra money to help with medical costs, they said.

The plan members were furious, blasting Sen. Lisa Brown, D-Spokane, and other proponents for what they called a “pension raid.” The proposal quickly evaporated.

This year, lawmakers tried to commission a study of ways to help local governments pay those costs – including another look at tapping the pension fund.

Gov. Chris Gregoire promptly vetoed that section of the bill.

“We had been shopping for a good attorney to jump on the state as soon as that task force study group touched a single dime or other benefit we have,” LEOFF-1 Coalition president Bob Monize wrote to members afterward.

‘We’re a dying breed’

Gow stands by the things that the board has told the city to pay for. Retirees get only six anti-impotence doses a month, he said, and private insurance commonly pays for such prescriptions. The first penile implant, he said, was approved in the 1980s by unanimous vote of the board.

“They said it was probably a psychiatric thing, so they did it,” he said.

Routine dental care – a perk that Spokane firefighters are now seeking, too – is capped at $350 a year. Gow personally lobbied for that benefit, citing studies linking dental health to heart disease and strokes.

The stair gliders? “You can’t tell someone to just move into the living room,” he said.

The non-emergency flight? “We could fly him back here and put him in a hospital and save double the money we spend on the air ambulance.”

And he points out a grim fact: that the number of LEOFF-1 members – who averaged 60 years old in the state’s last major study in 2001 – is steadily dwindling.

“We’re a dying breed,” Gow said. “As each one of us dies and goes away, there’s never going to be another one.”

Similarly, Rose defended a recent Spokane firefighters’ board decision to spend thousands of dollars on a gastric bypass operation for an obese retiree – something that a health maintenance organization or Medicare likely wouldn’t have covered.

It was medically necessary, Rose said, to prevent worsening health problems from diabetes and high blood pressure.

“It’s not to make him look better,” Rose said.

The boards do reject some requests, Gow and Rose said. One firefighter got a doctor’s prescription for a king-size waterbed. It was rejected, as were orthotic inserts for another retiree’s golf shoes. Meeting minutes show that the police board has in recent years rejected a $674 folding wheelchair ramp, $1,200 in alternative pain treatment, and a request for a $5,600 ultralight wheelchair. To save money, the board gave one retiree a wheelchair no longer needed by another, who’d died.