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Home Publications Blogs Beat the Press NYT Scare Story on SF Retiree Health Care

NYT Scare Story on SF Retiree Health Care

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Thursday, 16 December 2010 22:41

The NYT printed a scare story about San Francisco's retiree health care costs in lieu of a printing news. The paper told readers that the projected cost of providing health care for retired city workers has been estimated at $4.4 billion and the city has put aside just $9.7 million to cover this cost.

That sounds really really scary. However those who read through the article would discover that the city is currently spending more than $138 million a year for retiree health care. This fact implies that the city has been in the habit of paying for these expenditures out of its current budget. Furthermore the projection that is the highlight of this article implies that there will be no substantial increase in this figure in the years ahead. (If the $4.4 billion is spend over the next 30 years it would imply an average annual cost of $147 million.)

It is possible that the San Francisco's health care burden is more onerous than this calculation suggests, but readers of this article would have no way of knowing since the point of the article seems to have been to scare readers rather than provide information.

Comments (8)Add Comment
...
written by izzatzo, December 17, 2010 5:32
From the NYT article, this quote:
Moody’s Investors Service downgraded San Francisco’s debt rating in November, citing the enormous retiree health-care obligations, among other factors. ... The new estimate is 10 percent higher than the previous calculation of $4 billion, completed by the controller in 2008.


Since consumers and patients aren't even allowed to see itemized cost for insurance and health care until after the fact - if then, Moodys and the city controller were asked for the basis of the increase since 2008.

They explained that they had finally succeeded in itemizing the huge economic rent portion collected by health care insurance and providers, and it is expected to increase by 10 percent once Congress convenes with the new Republican majority in the House to reduce competition further.
...
written by skeptonomist, December 17, 2010 10:05
The easy way for San Francisco to solve its credit problems is for it to pay more to Moody's so it will get AAA ratings.
...
written by PeonInChief, December 17, 2010 2:26
Most people don't understand that the change in the accounting rules requires that the liability be reported, but that doesn't mean it's owed this year. What the rule change did is to allow business reporters to write silliness like this.
This too from the article,
written by diesel, December 17, 2010 2:56
"All city employees hired before 2009 were promised lifetime health care after five years of work. The coverage includes all dependents, and it does not matter how long before retirement the employee stopped working for the city." (my bold)

FIVE YEARS???!!! A measly five years? No wonder they're in trouble. Our public employees retirement system only vested you after five years, and that only entitled you to a smidgen of a pension. Post retirement health care was some COBRA scam that hardly seemed worth it.

Most statistics cited by critics of government union jobs skew the annual earnings of public employees upwards by a hundred percent. But if this quote is true, there's something seriously amiss with SF's benefit plan.
Another news flash...
written by myxzptlk, December 17, 2010 3:16
...Retiree's projected lifetime living costs exceed $1M, but only $300K set aside for retirement.
There seems to be two economics that we find ourselves discussing:
written by Scott ffolliott, December 17, 2010 3:30
There seems to be two economics that we find ourselves discussing: 1.) the general social democratic economic policies for all. 2.) the one that the administration and our congress have been selling to us for the last forty years, which support the plutocracy in the plunger of the sovereign people.
spend two minutes to proofread
written by tew, December 17, 2010 5:13
"...in lieu of a printing news."
"If the $4.4 billion is spend..."
The alarming market clout of San Francisco hospital chains
written by Rae, December 18, 2010 10:07
In the last decade, San Francisco hospitals have formed large chains, giving them increasing ability to drive up health care prices. It's much worse than in the central valley, for instance. NPR did a piece on this. I suggest that NYT should not have omitted such a critical factor from their article.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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