Gov. Matt Bevin’s state budget proposal does not include any money for retired teachers’ health care, causing a “huge concern” for teachers under age 65 who have retired in recent years.
Following the pattern of past budgets, the state was expected to give $145 million over two years to help cover health insurance costs for teachers under age 65 who have retired since July 1, 2010. At age 65, teachers qualify for Medicare coverage.
“This will cause a huge concern for those folks under age 65 who have retired since 2010,” said Tim Abrams, executive director of the Kentucky Retired Teachers Association.
“We haven’t received an explanation yet for exactly how many people it would affect or what it would do,” Abrams said. “It might cost these retirees their health insurance. Or it might shift the full cost of the insurance onto them, which would be a tremendous hardship for a person already in retirement.”
The Bevin administration did not respond to a request for comment on his proposal Wednesday. In past remarks, Bevin administration officials have argued that retiree health care for teachers — unlike pensions — is not legally protected by the “inviolable contract,” which means it can be reduced or eliminated.
Overall, Bevin’s budget plan includes $3.3 billion over the next two years to fully fund the pension sums requested by the systems that manage retirement benefits for state employees and school teachers, marking the first time in recent history that Kentucky has achieved that goal.
Originally, Bevin wanted to provide even more money. The Republican governor planned to switch Kentucky to a “level-dollar funding” method that would have required much larger payments up front to more quickly reduce the state’s unfunded pension liability of more than $40 billion.
That funding method would have required finding several hundred million dollars more in this two-year spending plan just for the Teachers’ Retirement System of Kentucky, according to one estimate.
But the pension proposal that Bevin offered last fall was rejected as too controversial by lawmakers, who have yet to unveil their own alternative during this winter’s legislative session. So for now, level-dollar funding is not part of the budget process.
Given the widespread spending cuts that Bevin recommends to pay for larger pension contributions, public employees said Wednesday, their gratitude is mixed with concern.
“This level of pension funding is desperately needed to ensure the promises made to public employees,” said Stephanie Winkler, president of the Kentucky Education Association. “However, KEA is very concerned with some of the proposals that eliminate programs.”
Jim Carroll, spokesman for pension advocacy group Kentucky Government Retirees, said he resents state workers and teachers being cast as villains by politicians.
“It’s a false binary choice,” Carroll said. “They say, ‘Yes, we can take care of the public pensioners, by taking food away from the starving children.’ That doesn’t address all of the money that was diverted from our pensions for two decades to make the state budget look balanced under false pretenses.”
“We need more revenue,” Carroll added. “We need a larger pie instead of slicing the same pie into smaller and different pieces.”