Mayor Rahm Emanuel is offering another $400,000 to soften the blow of Round Two of his three-year phase-out of the city’s 55-percent subsidy for retiree health care, but retirees and their City Council allies are holding out for $9 million.
That’s how much it would cost to “hold harmless” 2,500 non-Medicare eligible retirees whose pension checks come from the Municipal Employees Pension Fund and to cut in half the increase for those retirees who do qualify for Medicare.
That would still leave the mayor with $18 million in savings in his 2015 budget.
But, in negotiations with the American Federation of State, County and Municipal Employees Council 31 that went right down to the wire of Wednesday’s budget vote, the Emanuel administration offered just $400,000 more, according to AFSMCE spokesman Anders Lindall.
That’s $8.6 million short of the union’s demand and a mere $14.28 more for each of the 28,000 retirees and dependents impacted by the mayor’s phase-out.
On Wednesday, AFSCME and its City Council allies held a news conference to turn up the heat on Emanuel to sweeten the compromise.
The star of the show was retired library worker Mary Jones, who talked about the difficult choices she will be forced to endure if the mayor doesn’t soften the blow.
“Those of us who aren’t eligible for Medicare are especially hard hit. Overall, our premium will be more than double from 2013 levels to an annual cost of over $7,500 for an individual with no dependents,” Jones said.
“I will be paying $4,200 more next year than I paid this year — $629-a-month. The figure does not include co-pays, deductibles and rising prescription costs.”
Jones said she retired after 33 years with the understanding that affordable health care was guaranteed for the rest of her life.
“The cut in subsidy is forcing me and most other retirees to make hard choices about how to get by on our modest pensions. We don’t get Social Security,” she said.
“The city has argued that it must stop providing health care subsidies to save money. But, we don’t think it is fair to save money by taking money out of the pockets of retirees who worked hard all of their lives and now are struggling to make ends meet.”
Ald. Howard Brookins (21st), chairman of the City Council’s Black Caucus, said he’s encouraged by Emanuel’s $400,000 offer and hopes to convince the mayor to up the ante before the Year 2 increase takes effect on Jan. 1.
“We’re committed to work with the administration to do more for these retirees who have served the city, have modest pensions, already saw significant increases in their health care costs last year and cannot afford the annual premiums now looming over their heads,” Brookins said.
“We stand ready to … find additional resources and revenues to facilitate that end. Retirees are the bedrock of our community…Their paychecks allowed them to enter the middle class and become homeowners. Their modest pensions and affordable health care allow them to stay there. If these city retirees cannot make ends meet, we will have many more foreclosures.”
Last month, a federal appeals court gave Emanuel the green light to save $27 million in 2015 by forging ahead with a three-year phase-out of the city’s 55 percent city subsidy for retiree health care.
In July, the Illinois Supreme Court ruled that subsidized health care premiums for state employees are protected under the state Constitution and that the Illinois General Assembly was “precluded from diminishing or impairing” that benefit.
Attorneys representing the city’s 28,000 retirees and their dependents argued that the high court ruling “substantially increased” their chances of prevailing on the merits.
They wanted the 7th Circuit U.S. Court of Appeals to force Emanuel to roll back their monthly health insurance premiums to 2013 levels.
That’s when Emanuel announced plans to phase out the 55 percent subsidy by January, 2017—but continue that coverage for the 5,500 oldest retirees–and force the younger retirees to make the switch to Obamacare.
Instead, their request for a preliminary injunction was denied. That means retirees must bear the brunt of huge increases in their monthly health insurance premiums–anywhere from 30 percent to 79 percent, according to their attorney Clinton Krislov—until the appeals court decides the retirees’ lawsuit in mid-2015.
“We’re very disappointed that the court chose to make the retirees bear the cost of these increases during the period of the litigation when, in the past, state courts had stayed any changes while the litigation is pending,” Krislov said after the ruling was issued.
“These are good claims that retirees are entitled to lifetime health care they were promised. We showed a sufficient amount to justify holding everything in a freeze until the matter is resolved.”
Emanuel has maintained that only 25 percent of any increase in monthly premiums would be caused by Year Two of the subsidy phase-out.
He has also argued that retirees have options to not only avoid the latest round of increases, but reduce their monthly premiums.