The news from the New Mexico Retiree Health Care Authority (NMRHCA) is that things could be worse, but they are not exactly great.<\/p>\n
If you are one of the 22,000 state and local government and public school retirees covered for health insurance through this program, or a current employee looking to this program for your future, you might want to pay attention.<\/p>\n
RHCA has managed to save itself from several financial and political scrapes and survived to this point.\u00a0 At the moment, the program has projected solvency for the next 15 years.\u00a0 Sort of.<\/p>\n
Because decisions will have to be made, RHCA top managers, Director Wayne Probst and Deputy Director Marc Tyndall,\u00a0 are traveling the state presenting the issues to covered retirees who are willing to show up for an hour or two. \u00a0Some actions can be taken by the RHCA board; others would require legislation. \u00a0The issues are a microcosm of the nation\u2019s concern about the cost of health care, but they are not exactly micro.<\/p>\n
With no changes in revenue or expenses, the projection is that in 2018 the fund has to start drawing on principal rather than income to pay claims. That begins a downward trend until the fund runs out of money in 2029.\u00a0 That\u2019s what 15 years of solvency means. Nobody wants that.<\/p>\n
RHCA started at a disadvantage.\u00a0 This program, created to provide health insurance to government retirees at reasonable costs, was started by legislation in 1990.\u00a0 From the beginning, it was funded by small contributions from active employees and their employers.\u00a0 It started covering retirees the following year, with no chance to build a nest egg.<\/p>\n
Active employee contributions are the largest single source of funding.\u00a0 The contributions were originally one percent of payroll from government employers and another half percent from the employees.\u00a0 Legislation enacted \u00a0in 2009 increased the contributions to one percent from employees and two percent from employers.<\/p>\n
The covered retirees pay premiums for their coverage.\u00a0 Since they contributed during their active working years, the premiums are subsidized.\u00a0 Those who worked for a participating employer for 20 years or more get the largest subsidy and pay the smallest premium. \u00a0\u00a0Those who worked for less than 20 years pay higher premiums, based on the number of years of service.<\/p>\n
Health care costs generally increase about 8 percent every year, but revenues to the fund don\u2019t increase nearly that much.\u00a0 The number of active employees has shrunk due to budget concerns, and so have those contributions. \u00a0So the program has to find money somewhere else.<\/p>\n
Probst and Tyndall show a list of options currently under consideration. None of the choices are nice. Every choice takes a bite out of somebody\u2019s wallet. \u00a0Increase the minimum age of participation.\u00a0 Be less generous with coverage of members\u2019 children.\u00a0 Increase premiums across the board.\u00a0 Require 25 instead of 20 years of service for the maximum subsidy.\u00a0 Ask the Legislature to approve increased contributions from active employees and employers.\u00a0 Every option adds a piece to the long-term solvency of the program.<\/p>\n
I\u2019m watching these options carefully presented, and I\u2019m thinking that this is a thoughtful and rational approach to a difficult problem.\u00a0 The affected people are in the room.\u00a0 Everyone is concerned but nobody\u2019s behaving badly and nobody\u2019s playing politics.<\/p>\n
I have sometimes wished that every New Mexican could have access to a program like this, one that offers pretty good benefits in return for costs that are not pleasant but are affordable.\u00a0 Today I\u2019m wishing that our leaders at the national level would take a lesson from the tone of the way this organization is working on solving its long-term problems.<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Contact Merilee Dannemann through www.triplespacedagain.com.<\/em><\/p>\n Triple Spaced Again, \u00a9 New Mexico News Services 2012<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The news from the New Mexico Retiree Health Care Authority (NMRHCA) is that things could be worse, but they are not exactly great. If you are one of the 22,000 state and local government and public school retirees covered for … Continue reading