LANSING – The Michigan House of Representatives has passed a plan proposed by State Representative Richard E. Hammel (D-Mt. Morris Township) to fix the state's broken retiree health care system while saving taxpayer dollars and lowering the cost of doing business in Michigan. The plan now goes to the Senate.
"It has been a priority of mine to address the state's unfunded liability in regards to retiree health care," Hammel said. "Now is not the time to play politics with the state's financial position. This liability will hurt the state's ability to borrow at a reasonable cost. Legislators who don't support this initiative should remember that they are the biggest drain on the state's retiree health care system. The benefit of working only six years and receiving lifetime health care should have ended long ago."
Hammel, who has voted to end free lifetime health care for legislators and will do so again, is working to fix the state's unstable "pay-as-you-go" system of health care for hundreds of thousands of state retirees. This potential $23 billion liability puts their health care at risk and drives up costs for businesses, municipalities and the state. By hurting Michigan's bond rating, the liability also has long-term repercussions for the state's economic recovery.
Hammel's plan sets up a pre-funded trust that ensures that state retiree health care funds can be used only for that purpose, blocking the state from raiding them for other uses as it has in the past. It also saves taxpayer money by consolidating and streamlining administration of benefits for state retirees in five separate programs. As Chair of the Genesee County Board of Commissioners, Hammel helped Genesee County create a similar plan to address its $200 million liability in retiree health care.
"As someone who receives my health care from a bankrupt auto supplier, I know there is no such thing as guaranteed health care," said Hammel, a UAW retiree who worked at GM/Delphi. "But we have to do the best we can for people who have worked their whole lives and are counting on these benefits. Setting up a pre-funded trust that can't be raided is a step that we have to take as soon as possible."