In what is becoming a nationwide trend of local governments dumping employee health care obligations, Chicago Mayor Rahm Emanuel is out front, reducing health insurance coverage next year for more than 30,000 retired city workers, to begin shifting them onto Obamacare exchanges. On the exchange "marketplaces," individuals will have to select from among a list of healthcare plans "qualified" by the Department of Health and Human Services. The deadline to pick a plan is March 31. On April 1 penalties kick in for everyone who remains uninsured.
In Chicago, retired police officers and firefighters who retired between the ages of 55 and 64 (and are not eligible for Medicare), but whose coverage is guaranteed under contracts, as well as workers who retired before August 1989, are protected by a legal settlement. But the rest will begin to be phased-out over a three-year timespan, and those workers will have to pay for their own health insurance, or, get subsidies under the Affordable Care Act if their income is below 400% of the Federal Poverty Level.
According to the Washington Post, Detroit plans to duck out of its $5.7 billion in unfunded retiree health-care liabilities by dumping 19,389 retirees into the Obamacare marketplaces.
The Pew Center for the States put out a report looking at 61 cities across the country and found that, taken together, they had $126.2 billion in health benefits promised to retirees, but of that, only $8 billion has funding. According to The New York Times article "New York is Not Detroit. But...," New York City, for example, has an unfunded health insurance liability gap of $90 billion.