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| Source: Pew Center on the States 2010 |
"But pensions are just one side of the problem. Retiree health care and other non-pension benefits represent the other half of the challenge facing states: a $587 billion long-term liability, with just over five percent of that amount, or almost $32 billion, funded as of fiscal year 2008. Pew found that only two states have more than 50 percent of the assets needed to meet their liabilities for retiree medical or other non-pension benefits: Alaska and Arizona. Twenty-eight states have less than one percent of their liabilities funded, and twenty states have not set aside any funds." (source: pewcenteronthestates.org)
Aside from cutting services and benefits, or raising taxes and premiums, there is another way for states and municipalities to cut retiree health care costs (administrative and premiums) and retain benefits. Instead of overspending on group plans, States and munis can utilize a private medicare health insurance exchange, similar to Expedia for airline tickets and Lending Tree for loans, to let retirees purchase private medicare supplement insurance plans at competitive rates (Read: Extend Health prescribes new model - San Francisco Business Times).
