WHEREAS:
Older Americans are the largest consumers of health care services, largely due to chronic health conditions such as hypertension, arthritis, diabetes and heart disease, which tend to develop with age; and

WHEREAS:
Medicare – the federal social insurance program that covers most seniors for health care – provides an excellent foundation of health care benefits but continues to have significant coverage gaps; and

WHEREAS:
Eligibility for Medicare benefits begins at age 65, leaving younger retirees out in the cold; and

WHEREAS:
The average cost of an individual private insurance policy for a pre-65 retiree is nearly $4,000 a year, and the cost of comprehensive Medicare-supplement insurance for a post-65 retiree averages over $2,000 – payments that can significantly deplete a retiree’s pension check; and

WHEREAS:
Many AFSCME retirees, both pre- and post- 65, enjoy health care coverage that is largely paid for by former employers – a benefit they fought for at the bargaining table or in the legislative arena and gave up wage increases to ensure; and

WHEREAS:
The cost of these benefits has been rising by double digits every year – the result of an aging workforce, longevity in retirement, new technologies and price gouging by providers such as prescription drug manufacturers; and

WHEREAS:
Employers have often reacted to cost increases by trying to cut benefits and shift costs to retirees, creating unfair burdens on people living on fixed incomes and often in precarious health; and

WHEREAS:
This trend may soon be accelerated by new accounting rules for public jurisdictions that will require them to project all their retiree health care costs on financial statements – not just current year costs for current retirees, as is now the case, but also future costs for current workers who will not retire for decades; and

WHEREAS:
The new rules, imposed by the Government Accounting Standards Board (GASB) for implementation between 2007 and 2009, already have many jurisdictions calculating their long-range obligations and announcing astronomical figures to the media; and

WHEREAS:
Many states and localities claim that putting these figures on their books could lower their bond ratings and reduce their ability to raise capital – potentially requiring benefit reductions for current and future retirees; and

WHEREAS:
These threats cannot be taken lightly, as unprecedented numbers of corporations eliminated retiree health coverage after similar accounting rules were imposed on the private sector in the early 1990s; and

WHEREAS:
Employer claims are greatly exaggerated. The new GASB rules only change bookkeeping practices, do not require advance funding, and make no substantive alterations in how jurisdictions meet their year-to-year obligations for retiree health care – obligations that have been managed fairly well up to now by most public employers. THEREFORE BE IT RESOLVED: That AFSCME will fight all employer efforts to reduce retiree health benefits and shift costs to employees and retirees; and BE IT FURTHER RESOLVED: That AFSCME will work with affiliates to educate decision makers and the public to counter the fallout from the new GASB rules and to protect retiree health care benefits.

SUBMITTED BY: Ann N. Ebesuno, President and Delegate Russell K. Okata, Executive Director and Delegate HGEA/AFSCME Local 152 Hawaii