Mayor-elect Lori Lightfoot was urged Monday to find the $100 million a year needed to restore the 55 percent health care subsidy for Chicago’s oldest retirees — a subsidy abolished by Mayor Rahm Emanuel.
That’s a tall order at a time when Lightfoot faces a $1 billion spike in pension payments and a budget shortfall “more dire” than she anticipated.
But retirees’ attorney Clint Krislov argued that an even more desperate financial crunch is impacting 10,000 retirees who started working for the city prior to April 1, 1986 and, therefore, are not eligible for Medicare.
“People are being charged $2,000 individually a month, $4,000 for a couple, almost $6,000 for a family. … That’s a lot of money, even for somebody with a $100,000 pension,” Krislov said.
“These people don’t deserve this. Do the right thing by these people. Provide them the coverage that they were promised.”
Lightfoot’s spokesperson Nadia Perl had no immediate comment on the retirees’ request.
Lightfoot has promised not to mess with the Illinois Constitution’s pension protection clause — which prevents those benefits from being “diminished or impaired” — on grounds that a pension is a promise that must be kept.
Krislov made the same argument about the health care subsidy promised to older retirees.
“These people were promised that they would have lifetime health care coverage on a decent plan because their work wouldn’t qualify them for Medicare. They’re dying off and they’re having to incur huge amounts that they shouldn’t have to bear all by themselves,” he said.
“I understand it’s a lot of money for the city. But this is an expense that will work its way down to zero. … As each non-Medicare person dies and is replaced by a Medicare-qualified person, the cost” will diminish, Krislov added.
On Dec. 31, 2016, Emanuel completed a three-year phaseout of the city’s retiree health care program, including that 55 percent subsidy.
The controversial move was aimed at saving Chicago taxpayers $107 million in annual costs that would have ballooned to $307 million by 2018 and $541 million by 2023 if left unchecked, a mayoral commission had warned.
But it meant that those retired city workers who didn’t qualify for Medicare — roughly 10,000 of them — were on their own to search for coverage that was difficult or too expensive to find.
They were forced to choose between exorbitant premiums that, in some cases, were double their retirement checks or go without health insurance coverage at a time when they need it the most because of their age and declining health.
A few months later, a private email written by Emanuel in response to venture capitalist Henry Feinberg rubbed salt in the retiree’s wounds.
“Since when did Rahm Emanuel let a judicial ruling get in his way and not find a creative work-around solution?” Feinberg wrote the mayor in October, 2015.
Emanuel replied, “Never. Which is why I eliminated retiree health care. Only elected official to eliminate — not cut or reform — a benefit. Thank you very much. A $175 million saving!”
Emanuel has said he “wasn’t bragging” as much as he was “acknowledging how we stabilized” skyrocketing health care costs.
In a six-word ruling on Thanksgiving eve in 2018, the Illinois Supreme Court refused to hear the retirees’ appeal of an Illinois Appellate Court ruling that essentially upheld Emanuel’s three-year phase-out of retiree health care coverage and the 55 percent city subsidy for anyone who had not retired by Aug. 23, 1989.
The decision meant retirees were entitled only to bare-bones protections outlined by lower courts.
Circuit Court Judge Neil Cohen has ruled that the four city employee pension funds have an obligation to provide and subsidize retiree health care with funds provided by the city, but only at levels outlined in 1983 and 1985 amendments to the state’s pension code.
That guaranteed subsidy amounts to $55 a month for police and fire retirees not eligible for Medicare, and $21 for those who are. For retirees covered by the Municipal Employees and Laborers pension funds, the guaranteed monthly subsidy amounts to just $25.
Vanquished mayoral candidate Paul Vallas campaigned on a promise to restore the retiree health care subsidy and make the specific amount the “product of strategic bargaining” with union leaders.
Vallas argued there were “multiple pathways” toward providing a subsidy that would impose a permanent, long-term funding mandate” on the city.
Possibilities include diverting “a portion of the salary increase in the next contract” to fund retiree health care and requiring a “small annual contribution from active employees, which could be tied to income,” Vallas said.