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Pew Report Documents Challenges Faced by Philadelphia in Paying for City Workers' Pensions and Health Care
Date:6/29/2009

p>Health Care Benefits

Since the publication of Philadelphia's Quiet Crisis, the city's annual health care costs have declined on a year-to-year basis. That is because costs for firefighters and police officers fell in fiscal year 2009 after having been abnormally high in 2008--the result of one-time payments to settle arbitration disputes--and costs for other unionized workers stayed the same. Even so, health care costs paid by the city were 11 percent higher in the year ending June 30 than they were two years ago, and 45 percent higher than five years ago. Those increases are higher than the rise in city spending as a whole, but comparable to long- term national trends for health care costs.

Quiet No More looks at the significant differences between Philadelphia's health benefits system and those of other cities. One factor in the city's cost structure is that the vast majority of unionized workers do not help pay for insurance premiums through their paychecks; payroll deductions for health care are common in other cities, with the percentages paid by municipal employees in those cases often in the single-digits and teens. At the same time, Philadelphia city workers get less in retirement health care benefits than their counterparts in many other cities.

Representatives of several of the public-employee unions in Philadelphia who were contacted for the report say that their independent health and welfare funds--which manage health care for members-- have been able to avoid payroll deductions through cost-containment programs. In addition, they say, the level of benefits should be viewed in the context of total compensation. While comparisons are difficult, total compe
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SOURCE Pew Charitable Trusts
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