“It’s convenient to say, ‘Well, they can go out and get coverage in the health insurance marketplace,’” Kreisberg said. “The moral obligation to the workforce remains.”
Cities may be able to supplement coverage or cost, but “if their primary interest is to simply shed those obligations completely and walk away, that’s where we’ll have conflict,” Kreisberg said.
Left Behind
The exchanges won’t help all retirees, said Dwane Milnes, a former city manager of Stockton, California, which filed for bankruptcy last year.
The city ended subsidized coverage June 30, and Milnes, who is president of the Association of Retired Employees of the City of Stockton, estimated that as many as 300 won’t use exchanges because they won’t qualify for subsidies or won’t be able to afford premiums.
“They need to look at the issue of who is still going to be left uncovered, even with the exchanges, and to find some way of taking care of those folks,” Milnes said.
John Day, 52, a retired Detroit police officer, said being left to an exchange would be a slap in the face. The police and firefighters are not part of the Social Security system, and those hired before 1986 are not part of Medicare. Benefit plans were supposed to compensate.
“Imagine if they said tomorrow your Social Security, your Medicare is going away and you’re going on Obamacare,” Day said in an interview. “How would you feel?”
Model Cities
Still, municipalities might not have much choice. As of fiscal 2009, the 61 most populous U.S. cities had funded only 6 percent of $126.2 billion in retiree health-care liabilities, according a report in January by the Pew Charitable Trusts.