The CA Giveaway, Part II

Like most employers, the State provides health insurance to active employees. But unlike most employers, the State also provides health insurance to retired employees and their dependents. Believe it or not:

  • The State spends ~$9,000 in insurance subsidies per year per retired state employee and ~$8,000 per year per dependent, even exceeding the average cost of employer-sponsored insurance for active employees ($7,000, per Kaiser Family Foundation),
  • Those benefits are provided even when the retiree or dependent has another job that offers insurance, is covered by Medicare, or is entitled to premium support from the Affordable Care Act or the California State Premium through Covered California, which provides the highest levels of premium support in the country.
  • Those benefits cost $4.9 billion per year. Including cities, schools and transit and other agencies, they cost $10 billion per year.

This has to stop. No other state showers such subsidies on retired employees, who are already entitled to the highest pensions in the land. Students and residents are needlessly threatened with cuts and working employees are needlessly threatened with layoffs because you are needlessly subsidizing retired employees and dependents. Ending that expense is a top GFC priority for 2021.

David Crane
President
@DavidGCrane

Lecturer at Stanford University and president of Govern For California

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