I just heard tonight that Virginia is going to borrow something like $600,000,000 out of the state pension fund to cover revenue shortfall. I am partially surviving on my late husbands teaching pension.
I also have my health insurance through the local board of education from my late husband’s days as a teacher. Unfortunately I can only choose one plan from two choices. I have Kaiser Permanente for which I pay about $250 a month. A close friend has a Kaiser policy for which he pays about $100 per month. He has a higher deductible and has to pay a bit more for doctor visits, but his plan would be much cheaper for me and I can afford the deductible and other differences. I called the school office and asked if I could change to the other policy. They said the only way I could would be to drop their policy which I could then NEVER get back. If I go directly to Kaiser, they do not have service in several places I might move to, but if I keep the schools policy, I am covered anywhere in the country. I am really ANGRY that I cannot get the cheaper policy through the school’s insurance program.
Most company plans roll over at the beginning of each year, after an “open enrollment” process. My company has a similar setup (low/high deductible) but nowhere as cheap.
Once you make a choice, you’re stuck with it for a full year.
Don’t you get to choose your plan annually?
They aren’t borrowing money OUT of the pension fund.
Each year, there is an amount put in the pension fund for each employee, it’s 5%, and it used to be split between employee and employer but since 1983 the state pays it all. Anyway, each year they also calculate the estimated future need of the system, and if it needs more money the state puts more money into the system.
For this year and the next, the state will NOT be paying INTO the system that extra amount needed to fund the future retirement liabilities of the people now working. The budget does pay part of the liability next year, but only 20%, and only for teachers.
But in 2013 they will pay it back, with 7.5% interest. Now, this isn’t what you really WANT to do, but the unfunded liability is for the people currently employed, not people already retired. And if you were given a choice to either be fired, or to have your pension underfunded, possibly risking your future payout, which would you choose?
This was actually the idea of the Senate Democrats, and it was the House Republicans who forced the rule to pay back the money.
In addition, they ruled that for all NEW hires, the new hires will go back to paying the 2% (1% the first year) that they used to pay way back when. However, the law gives localities the right to pay that for the local workers — of course, no locality can afford that right now, I’m guessing.
Anyway, when you have a 4 billion deficit, you have to cut back on something. We are essentially back to 2006 spending levels — a REAL cut, not like all the “cuts” to the expected big increases.
That is government health care for you -- limiting choices, forcing you to buy what they think is best for you. Private companies do this as well -- this year I had no choice anymore in health care.
If we banned all job-related health care, and the companies paid us the extra and then we could get tax-deductable insurance on our own, you could have chosen any plan you wanted, there would be competition for health insurance like there is with other insurance.