Unions, retirees slam Emanuel plan to cut health-care subsidy
BY FRAN SPIELMAN City Hall Reporterfirstname.lastname@example.org May 15, 2013 11:22AM
Updated: June 18, 2013 7:23AM
Union leaders and retirees blasted Mayor Rahm Emanuel on Wednesday for saving $108.7 million by phasing out a city subsidy for retiree health care and using roughly the same amount of public money to build a new basketball arena near McCormick Place.
“Why are retirees with the least ability to absorb this financial blow the first ones made to suffer?... Can’t the mayor find the savings elsewhere?” Fraternal Order of Police President Mike Shields wrote in an email to the Chicago Sun-Times.
“Our city continually victimizes its most vulnerable citizens with red light cameras in lower income neighborhoods, dangerous school closures, high murder rates caused by a downsized police force, and now Chicago is set to abandon retired police officers who risked their lives serving and protecting this City and were promised healthcare during retirement,” Shields wrote.
Tom Ryan, president of the Chicago Firefighters Union Local 2, branded it “outrageous” that city retirees were forced to read about “this drastic change in their retirement security” in the Chicago Sun-Times, instead of hearing it first from City Hall.
“ I also find it ironic that this reduction to promised healthcare coverage for retirees, which the City says will save it 109 million dollars per year, is proclaimed at the very same time that the Mayor is poised to announce a plan to use millions of dollars in public funds to help build a basketball facility for a private institution. I must ask, where are our priorities?” Ryan wrote in an email to the Sun-Times.
Henry Bayer, executive director of AFSCME Council 31, said Emanuel has offered “no details except to say non-Medicare retirees will have to seek private insurance through an exchange” mandated by Obamacare that has not yet been launched.
“This uncertainty will cause anxiety and fear for tens of thousands of seniors who gave their working lives to public service — men and women whose retirement savings are already under attack in the name of ‘pension reform,’ “ Bayer said in an emailed statement.
The Chicago Sun-Times reported this week that Emanuel has decided to extend the city’s 55 percent subsidy for retiree health care by six months — until Jan. 1 — then phase it out over the next three years after giving Obamacare a chance to shake out.
But, 5,500 of the oldest and most vulnerable retirees will be guaranteed a 55 percent subsidy as long as they live.
Pat Twohill’s husband is a former Chicago Police officer who retired in 1994 and won’t have that lifetime guarantee. After three knee surgeries, she’s confined to a wheelchair and heavily reliant on city-subsidized health care.
“We’re not sure how Obamacare is going to work. It’s very scary. My health is very uncertain and it makes us very nervous that we may have to dig into our savings to pay for medical care,” said Twohill, 67.
“I wish someone could get the mayor to understand what was promised to these people. I know there’s not enough money to go around. But it’s just sad.”
She added, “My husband worked in the Monroe District. In the beginning, it was Skid Row. He put his life on the line with some of the crazy things he was involved in picking up people and going into the projects. He delivered a few babies. He was an old school police officer. And for all that, he gets this.”
The City Council approved the existing retiree health care settlement and must approve any changes. Aldermen already on the hot-seat to approve Emanuel’s controversial parking meter changes were getting an earful Wednesday from thousands of angry and frightened retirees.
“My biggest fear is that some of them won’t be able to live within their means. They have mortgages to pay. Many still have educations they’re paying for — older children in their teens with college educations to pay for. They want to enjoy their golden years,” said Ald. Matt O’Shea (19th), whose Southwest Side ward is home to scores of city retirees.
Ald. Scott Waguespack (32nd) agreed with union leaders that Emanuel’s “priorities” are out of whack.
“They keep saying we don’t have the money for this kind of stuff and the money is sitting in TIF’s. They’re gonna give (about $100) million to DePaul. There’s the money right there,” Waguespack said.
“Stop telling us we need to go find other money when it’s sitting there in TIF accounts and funneled over to private concerns when your priorities are to lop off access to health care for people who put in a lifetime of service.”
Ald. Edward M. Burke (14th), chairman of the City Council’s Finance Committee, acknowledged that retiree health care is a “very emotional issue” that triggered a lawsuit that resulted in the 55 percent subsidy Emanuel wants to phase out.
“It’s very, very, very expensive. …The way it’s going now, the city doesn’t have the money to continue to fund these retiree benefits at the rate we’ve been doing,” Burke said.
“If there is, indeed, a replacement that can be made available through the Obamacare legislation, that’s something that really needs to be explored.”
Clinton Krislov, an attorney representing the oldest group of retirees, said he’s pleased the city has adopted his recommendation to “extend coverage for life” for the 5,500 oldest and most vulnerable retirees — known in the marathon litigation as the “Korshak class — who retired before Aug. 23, 1989.
But, he’s not about to abandon the 30,000 post-1989 retirees.
“It is certainly a concern that the city is going to wean them off and drop them no later than the end of 2016. It’s an assumption that the new federal health care plan will be a better package for them, which is not a proven thing yet,” Krislov said.
“We’re glad the city has taken the looming June 30 deadline and moved it back to the end of the year. But, we look forward to meeting with the city and the pension funds to discuss the future, including their existing participants’ rights to continue coverage beyond that.”