Retirees are Under Attack in Detroit and Cincinnati

July 26, 2013

Retirees are facing frightening new threats this week in two major U.S. cities - Detroit and Cincinnati. The first involves the city of Detroit’s bankruptcy filing, the largest filing by a local government in U.S. history. Because Michigan's constitution says that public pensions “shall not be diminished or impaired,” Ingham County Circuit Court Judge Rosemarie Aquilina had ruled last week that the bankruptcy filing violates the state constitution by jeopardizing the pensions of Detroit retirees. She had directed Emergency Manager Kevyn Orr to withdraw the bankruptcy application and issued temporary restraining orders preventing Orr, Michigan Gov. Rick Snyder (R) and Treasurer Andy Dillon from proceeding with the bankruptcy process. However, a federal judge on Wednesday swept aside lawsuits challenging the filing.

Detroit has about 21,000 retirees - police, firefighters, City Hall clerks, trash haulers, bus drivers - who are owed money and fear their income is at risk in a bankruptcy, since public workers are not protected by federal pension insurance. The average public service pension is $19,000 per year. AFSCME members and other public sector workers were not consulted for input before the filing. “Detroit’s public service employees and retirees worked hard and played by the rules, but now Governor Snyder and Mr. Orr are moving to take away their right to retire with dignity,”  said Edward F. Coyle, Executive Director of the Alliance. For more, go to http://tinyurl.com/p2xvd63.

In Cincinnati, a corporate-backed attack is being lodged. The biggest change would be to workers employed by the city beginning in 2014.  Instead of getting a defined benefit at retirement, with a known payment each month, employees would have a 401k plan. “It would make it so the city’s retirees would have claim only to the retirement funds they have had taken out of their paychecks and nothing more – no employer match,” said Bentley Davis, Senior Field Organizer for the Ohio Alliance. The charter amendment also reduces the cost of living increases for current retirees. A television news clip from Cincinnati includes Ms. Davis noting that future retirees especially would take a big hit. “The pension in Cincinnati is in lieu of Social Security. They don't pay in but as a result they don't get Social Security,” she said. To view the clip, go to http://tinyurl.com/n3ml533.  

See all the Highlights from the July 2 Human Chain Day of Action
The Alliance’s activities with partners on July 2 to stop the chained CPI Social Security benefit cut included 2,800 participants, generated scores of press hits, and raised awareness of the issue in towns and cities across the country. Go to http://bit.ly/13LaJRk to see the final report!

Alliance Prepares to Celebrate Medicare’s 48th Birthday Next Week
Next week, Medicare celebrates 48 years of providing care and security for millions. The Alliance will be using the occasion to spark a national movement, aggressively defending and strengthening Medicare and the protections it provides. Unfortunately, some politicians in Washington continue to talk about saving money by further means-testing Medicare and shifting more costs to beneficiaries. These “reforms” would seriously hurt current and future retirees and undermine the program. The Medicare Drug Savings Act, S. 740 in the Senate and H.R. 1588 in the House of Representatives, introduced by Sen. Jay Rockefeller (D-WV) and Rep. Henry Waxman (D-CA), would save the Medicare program $140 billion by eliminating the loophole that blocks Medicare from negotiating with big pharma for cheaper drugs. Click on http://tinyurl.com/q3jnwer to support it if you have not done so already. Visit http://tinyurl.com/mjn2von for stories from members about what it's like for retirees and why shifting more costs onto beneficiaries would be a disaster.

Affordable Care Act Will Cut Cost of Self-Insuring in New York By Half
New York State insurance regulators have announced that insurance rates in 2014 will be at least 50% lower than the current rates, thanks to the online purchasing exchanges created by the Affordable Care Act (ACA). This change affects people who do not receive insurance through their employers. Currently, 2.6 million New Yorkers are uninsured and only 17,000 buy insurance on their own.  The ACA’s exchanges are spurring competition between insurance companies and driving them to lower their rates. The decrease in costs, combined with the ACA’s subsidies for low income individuals and the fact that it is now illegal for insurance companies to deny coverage due to pre-existing conditions, will enable many currently uninsured Americans to purchase insurance. A New York Times article about it is at http://tinyurl.com/kocbx2b. “This is great news for the millions of New Yorkers who are uninsured, including many retirees who are not yet eligible for Medicare,” said Barbara J. Easterling, President of the Alliance.

Delaware Caps Co-Pays for Specialty Prescription Drugs – is Whole U.S. next?
Gov. Jack Markell (D-DE) recently signed legislation that caps patients’ co-pays for specialty prescription drugs at $150 a month. Delaware’s new law applies to drugs that cost $600 or more a month and are used to treat medical conditions that include multiple sclerosis, hepatitis C, and rheumatoid arthritis. “Big pharma and greedy insurance companies should not be allowed to exploit vulnerable patients facing chronic and debilitating illnesses,” said Ruben Burks, Secretary-Treasurer of the Alliance. Read the Washington Post’s write-up at http://tinyurl.com/oahdvyg.

A bipartisan group of lawmakers introduced legislation on Thursday to allow Medicare Part D beneficiaries nationally to request lower co-pays for high-cost specialty drugs used to treat chronic illnesses. The proposal, the “Part D Beneficiary Appeals Fairness Act,” is spearheaded by Sens. Bill Nelson (D-FL) and Susan Collins (R-ME) in the Senate and U.S. Reps. Hank Johnson (D-GA), Walter Jones (R-NC), David McKinley (R-WV) and Bruce Braley (D-Iowa) in the House.  The Senate bill is S. 1365; the House measure is H.R. 2827. Currently, Medicare Part D beneficiaries are prohibited from seeking exemptions from their plans that could lower their cost-share for specialty drugs - a basic right beneficiaries have throughout the rest of the program.  A U.S. Congress news release noted that more than 30 national groups support the bill, including the Alliance.

Iowa Alliance Holds its Convention
Seventy-five members attended the Iowa Alliance’s convention in Altoona, Iowa on Wednesday.

State Senate President Pam Jochum gave a lively presentation about the Medicaid expansion that was finally passed and signed by the governor, and the Raging Grannies provided lively lunch-time entertainment with creative and timely "senior" songs. Jan Laue was re-elected President, and Rich Fiesta, Director of Government and Political Affairs for the national Alliance, was a speaker.

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