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Balancing Dollars and Health Sense
Date:6/24/2008

New Center for Excellence Report: A Framework for Decision Making on

Funding State Retiree Health Care Benefits

WASHINGTON, June 24 /PRNewswire/ -- A new report from the Center for State and Local Government Excellence looks at the complexities surrounding the funding of state retiree health benefits and possible options to finance future obligations.

Balancing Dollars and Health Sense: A Framework for Decision Making on Funding State Retiree Health Care Benefits was written by the Institute for Public Policy and Social Research (IPPSR) at Michigan State University with a grant from the Center. It is the result of a request from the Michigan House of Representatives Committee on Retiree Health Care Reforms for research on retiree health care funding options.

Michigan has unfunded retiree health care obligations estimated at $22.7 billion. The Michigan House formed the Committee on Retiree Health Care Reforms in July 2007 to develop strategies to address this unfunded liability.

Balancing Dollars and Health Sense looks at practices from eight states -- Michigan, Illinois, Ohio, Indiana, Wisconsin, Minnesota, Vermont, Hawaii, and Massachusetts; explores ways to manage a smooth transition from the current pay-as-you-go approach to developing one that will effectively address the unfunded liabilities and rising retiree health care costs over the long term; and offers recommendations to policymakers, including:

-- Establish a nonpartisan commission to develop a plan and keep the public and state employees informed of its progress.

-- Create an irrevocable 115 Trust Fund and consider multiple approaches to fund it.

-- Merge administration of plans managed by the State as much as possible to unify the purchasing process and increase bargaining power, while keeping employee group plans separate.

-- Assure current retirees they will receive promised benefits.

-- Balance the need to contr
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SOURCE The Center for State and Local Government Excellence
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