Retiree health costs –the next California fiscal crisis

Retiree health benefits may bankrupt California cities, school districts and state agencies in the coming years, according to the LA Times. Public employees have historically had relatively low pay but rich benefits. As health care costs have risen retiree benefits costs are getting out of control. Most of the agencies don’t really know how big a hole they’ve dug for themselves and may end up having to be bailed out by the state. But the state isn’t in good financial shape either.
The only silver lining is that the Medicare drug benefit is likely to relieve the agencies of a large and rising expense. Unfortunately that burden will now fall on the rest of us.

August 5, 2005

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