As health care costs continue rising across the country, retirees from Ohio public service positions are being asked to foot more of the bill than ever to keep the system running.
According to Bill Graham, spokesman for the Ohio Police & Fire Pension Fund (OP&F), health care coverage for retired firefighters and police officers once considered a guarantee is now a more costly endeavor.
“Back nearly 40 years ago in the 1970s and 1980s health care costs were really almost an afterthought because it was so inexpensive to offer that it was offered at no charge to our members,” Graham said. “Not just for the pension systems, but for everyone in our country, the health care costs have gone up so much that it is now a significant expense.”
As a result, OP&F is no longer able to cover the entire cost of health care for retirees.
“At some point along the line OP&F realized that we have to require our members help pay for (their health care),” Graham said. “It was nominal at first but it grew and grew and then in 2004 was really the seismic shift where retirees really started to feel the pain of helping to pay for their own health care and it isn’t cheap. Now what is being discussed and hasn’t been adopted is to change (the percentage paid by OP&F) based on years of service, so the fewer years of service you have put in, the more you will pay toward your health care.”
Graham said OP&F currently pays 75 percent of health care premiums for members and 50 percent for their spouses. OP&F projects it paid nearly $162 million to sponsor health care coverage in 2009 alone.
The proposed changes will help to combat rising health care costs.
Part-time Oxford police officer John Buchholz, who is officially retired, is no exception to the health care costs associated with retiring from public service.
“My health insurance went up when I retired because the retirement system pays different percentages for me and my wife than my employer did,” Buchholz said. “The pension system determines what percentage of my premium they will pay for me and my spouse so if the premiums from United Health care go up they’re still going to pay those percentages but my premiums will be going up anyways.”
According to Buchholz, this included an increase of between $40 and $50 per month between 2008 and 2009.
“I was talking to a guy the other day who is going to retire in OPERS and they are going to cover him, but they are only going to cover his wife for a couple years and then they won’t cover her at all,” Buchholz said. “I know there are changes with differences between each pension system.”
As far as the public is concerned, taxpayers do not directly fund retiree health care. Taxpayer money is used to pay the salaries of some public service employees such as police officers and firefighters.
In the case of OP&F, the pension is then funded mostly through employer contributions that come from these salaries and a smaller percentage of this money is used to fund the health care system.
“The city of Oxford, to take an example of where you’re from, has a fire department and a police department and taxpayers fund their salaries,” Graham said. “In effect they also fund the percentage that the city of Oxford pays to OP&F to fund our pensions and health care.”
Ultimately, for Buchholz and other public service retirees, health care costs are on the rise and it is his responsibility to foot the bill.
“Am I happy with the premiums? No. Am I happy with the coverage? Yes,” Buchholz said. “When you retire they’re pretty up front about telling you ‘We just have to get you to Medicare.’ The sad state of it is, you know you’re old when you’re looking forward to Medicare.”