AZ Committee Recommends Cutting Retiree Health Care

August 7, 2003 ( - An Arizona State Retirement System committee has recommended ending its involvement in providing health insurance for retirees not eligible for Medicare.

If the recommendation is approved, the decision would affect m ore than 4,000 early retirees from state government who could suddenly be faced with the prospect of changing health insurance providers. The retirees that now have coverage under a Pacificare plan, would instead need to turn to former employers, such as school districts and state agencies, for coverage, according to a report in The Arizona Republic.

The move is needed because the pool of retirees in the state plan is declining, sending premium rates higher and scaring off potential health providers, committee members said. “We’re trying to get out in front and address an issue before it becomes a crisis with no solutions,” said committee Chairman Chuck Essig, who is a member of the nine-member state retirement board.

However, before the recommendation could go into effect, the plan would still need approval from the full board and probably the state Legislature. Therefore, Essig said changes would begin no sooner than 2005.

Not surprisingly, the recommendation has drawn sharp criticism from some local school districts and other public employers that fear the dearth of uncovered retirees would shift responsibility for providing insurance back to them. This in turn would drive up health care premiums for current employees, these groups fear.