Sep 16, 2013
Detroit’s emergency dictator Kevyn Orr is threatening to eliminate health care for city retirees under 65. He would replace it with a $125 a month stipend toward health insurance that retirees would have to purchase from the new exchanges being created under the federal mandatory health insurance program.
The new exchanges are set to become available October 1, to give the insurance companies time to sign people up in time. So, Orr is pushing October 1 as a deadline, using it to put pressure on the city’s unions to come to an agreement before then.
Orr’s so-called “offer” is a joke. That “buck and a quarter,” as Lou Hatty, a trustee for the city’s General Retirement System, so correctly called it, wouldn’t put a dent in the actual cost of any decent health insurance. Some insurance can cost $1000 a month for a family plan. Many people buying insurance from the exchanges, especially those with low incomes, are likely to opt for plans with lower monthly premiums. Those plans will carry huge deductibles and out-of-pocket expenses. Those who wind up sick, often older people, will end up having to pay exorbitant medical costs from their own pockets.
Of course, Orr’s $125 a month “offer” is just a bargaining chip, floated so that when he later raises the offer, union officials can convince their members it was the best they could get. It’s not unlike his initial threat that the pension fund would receive only 10 cents on the dollar for what the city owes, hoping that when he later offers something like 70 cents on the dollar, workers will jump on it.
Orr will probably come with a higher offer on health care shortly before the October 1 “deadline.” Orr hopes to escape a long legal battle over the constitutionality of these attacks. He has already said he wants the bankruptcy done quickly, as has the federal bankruptcy judge. City workers likely will be given little time to consider the offer, and will be threatened with getting nothing if they reject it.
If Orr and the forces who stand behind him – like the banks and corporations who have benefitted from huge tax breaks and predatory lending in Detroit – succeed in forcing through this retiree health care bait and switch, Detroit’s example will spread to other cities and states like wildfire. If those who work in the private sector think they’ll be safe from similar cuts, dream on!
Workers only stand to lose more and more if they accept these attacks.