You could not be more correct. Most every state and large city has caved to the unions to the extent there is no way they can pay the promised benefits. Now that the Feds have shoved more of the medicaid back to the states, things will hit the fan earlier.
The unions will sue, of course, but somewhere a judge will become captain obvious and realize that if he (or she) upholds the union benefits, chaos will prevail. My guess is that court will rule the contracts were contracts of adhesion with the unions having all the bargaining power resulting in terms which violate public policy and are unenforceable.