Detroit could end health care coverage for retired employees younger than 65.
Retiree health care costs make up about $6 billion of Detroit’s roughly $11 billion in unsecured debt.
City officials told Detroit pension trustees Wednesday that emergency manager Kevyn Orr is considering the plan. The idea isn’t new, though—Orr floated it as early as June, in his proposal to Detroit’s creditors before the city filed for bankruptcy.
Orr’s plan calls for the younger retirees to shifted onto the new insurance exchanges coming online with the Affordable Care Act.
That’s a concern for retirees like Regenia Simmons. “I am not at all very knowledgeable about what the health care exchanges are,” Simmons said. “I’m familiar with the plan I have now. So there’s just an innate fear of, ‘What am I getting?’”
City officials familiar with Orr’s plan say the city considering a $125 month stipend to help employees cover insurance costs.
Helen Levy, an associate professor at the University of Michigan’s Institute for Social Research, said retirees like Simmons should be concerned, but not necessarily panicked.
Health care exchanges aren’t up and running in Michigan yet. But Levy said that in places where they are, prices have been lower than expected. And the policies must meet a certain standard.
“The exchange makes sure that the coverage that the plans are offering is good coverage,” Levy said. “It has to cover certain categories of service, and it has to provide financial protection. And that’s really what you want in an insurance plan.”
Under Orr’s reported plan, retirees 65 and over would be shifted to Medicare.
CORRECTION: An earlier version of this story reported Detroit's overall unsecured debt to be 11 million dollars. It is actually 11 billion dollars. We regret the typo.