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Attorney for retired city employees wants subsidy for health care to continue

Updated: February 26, 2013 6:45AM

An attorney representing retired city employees urged Mayor Rahm Emanuel on Thursday to continue the 55 percent city subsidy for retiree health care for five more years to give Obama Care a chance to shake out.

Two weeks after a mayoral commission raised the possibility of forcing retirees to fend for themselves under the federal plan, Clinton Krislov argued for a reprieve until the transition to the Affordable Health Care Act is complete.

“It’s not fair to tell retirees, ‘Don’t worry. You’ll be better off when we dump you.’ The idea that the federal plan will leave them better off because they can buy health insurance with subsidies is totally unproven,” said Krislov, who has represented retirees in the marathon case.

“Retirees have a good and secure program that gives them predictability in their lives. Extending the current settlement five years will give us the experience of how the two programs work in conjunction with each other or in substitution.”

Mayoral spokesperson Kathleen Strand did not respond directly to the request for a five-year extension. In an e-mail response to the Chicago Sun-Times, she would only say that the mayor continues to review the report.

“The City owes it to our retirees, current employees and taxpayers to come together and find a solution that strikes the right balance between providing affordable healthcare choices for our retirees and serving the interests of the taxpayer,” Strand wrote.

Krislov said he would be “glad to sit down with the city and talk about” an increase in retiree contributions during a five-year extension.

But he noted that under-funded city employee pension funds have not yet decided whether to continue their fixed monthly subsidy of $95 for non-Medicare retirees and $65-a-month for those who are eligible for Medicare.

“If the funds are not willing to do that, that all by itself increases retiree costs by an additional $65- and $95-a-month,” he said.

Krislov also took issue with the Retiree Health Commission’s claim that Chicago taxpayers can no longer afford to subsidize retiree health care at the existing, 55 percent level.

He argued that the projected, $194 million-a-year cost in 2014 represents 3 percent of the city budget. He further maintained that a forecast that retiree health care costs would continue to grow at a compounded 11 percent annual rate was way off.

“Each year, rates charged are reconciled with actual experience. Those reconciliations have almost always resulted in overcharges with refunds of 19-to-27 percent,” Krislov said.

He added, “Everybody has grabbed on to this vernacular that costs are unsustainable from the Social Security debate. It’s become the popular synonym for, `I don’t want to pay for it.’ ”

The commission’s explosive report outlined a series of options to save anywhere from $17.5 million-a-year to the entire $108.7 million over two years by phasing out the subsidy and forcing Obama Care to pick up the slack.

Within those options are proposals to reduce city support from the current 55 percent to: 40 percent; 30 percent; 20 percent; or even 16 percent for some classes of retirees and to eliminate support for dependents altogether while maintaining it for retirees.

Other City Hall sources maintained that a five-year extension would cost Chicago taxpayers an additional $308 million — on top of the $108 million-a-year they are already paying. That’s based on an independent actuarial firm’s analysis that the city stands behind.

The ball is now in Emanuel’s court. He must choose between the options and brace for the considerable political fall-out.

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