By Charles Sercombe
Hamtramck public employee retirees are getting a new healthcare insurance plan, and it’s going to cost them more.
Just how much more is not entirely clear, and the full impact of the new plan was not known at press time Thursday.
The changeover, which was supported by the city council at Tuesday’s council meeting, will allow the city to save $1.5 million.
The city has a $3.4 million budget deficit and owes its retirement fund, the Municipal Employees’ Retirement System, $2 million.
Emergency Manager Cathy Square, who submitted the new plan to council, said she approached the retirees about the change but they rejected the proposal. Square has the authority under the state’s new emergency manager law to make the change, pending approval by the state Treasury Office.
The city council could have rejected the proposal, but it would have had to come up with an alternative plan and submit it to the Treasury Department within 10 days.
Retirees who are under 65 years old will be shifted to a Blue Cross HMO and will no longer receive deductible expenses supplied by the city.
For retirees 65 and older, they will remain on Blue Cross/Blue Shield, but they, too, will no longer receive deductible expenses from the city.
For those who are single, they will be responsible for the first $2,000 in expenses and for those with a family, the first $4,000.
The city’s deductible funds will be wiped clean on Jan. 1, meaning any retiree who needs medical attention or a visit to the doctor should do so before that date in order to avoid paying a deductible.
Retirees under 65 will also have to pay co-pays for prescription drugs. For generic drugs, they will pay $10, for name-brand regular drugs $40 and for special drugs $80.
The city will mail out letters to retirees outlining the changes.
While Square said retirees rejected the proposal, retired Detective Aaron Brown said retirees were never asked if they would agree to the plan.
“There was absolutely no negotiation,” he said.
Instead, Brown said, a city official, not Square, “laid out the plan they intended to do.”
The lack of negotiation was a point of contention for Councilmember Robert Zwolak, who said there was no “serious negotiations” with retirees.
Prior to Square being appointed emergency manager, the council attempted to get a new health coverage plan in place, but did not have the authority to make the change.
Councilmember Cathie Gordon said the council discussed the issue for two years without luck. She said supporting Square’s plan is “crucial to the finances of the city.”
Councilmember Anam Miah agreed, saying, “It’s fair for us to move forward.”
Zwolak was the only councilmember to oppose the plan.
Things could be worse for Hamtramck retirees. Detroit’s retirees are facing huge cuts to their pensions as that city works its way through bankruptcy. Both Hamtramck and Detroit are under the control of an emergency manager.
Hamtramck’s Emergency Manager has rejected the bankruptcy option so it’s unlikely retirees here will have to suffer any more cuts.