NCPA - National Center for Policy Analysis


March 2, 2007

Soaring health care costs combined with county employees retiring earlier and living longer are driving up the price of retiree medical coverage in counties across California. But Contra Costa County finds itself in an especially bad situation because its benefits are so costly, according to a report released by the county.


  • Contra Costa health obligations to retirees and current workers when they retire are at the same level as five of the state's largest counties -- Alameda, Orange, Riverside, Sacramento and San Diego - combined, reaching $2.6 billion in total.
  • Many California counties have eliminated retiree health benefits for new hires, Contra Costa has not; and while other counties have set a fixed dollar amount on what they will contribute, Contra Costa picks up the tab for 80 percent to 98 percent of costs.
  • Sacramento County, for example, caps its contributions at $244 per month; Contra Costa pays $886 for a monthly family plan at Kaiser Permanente.

In addition to outlining the problems, the report also offered possible solutions to decrease the liability, including:

  • Moving retirees ages 65 and older onto Medicare, shifting the burden from the county to the federal government.
  • Not providing retirement health benefits to employees currently under the age of 40, and not providing retiree medical coverage to management and non-union employees.

The most drastic recommendation -- which would more than cut the liability in half -- would be to freeze the county's contribution toward health care payments.  Under this proposal, the county would not continue paying 80 percent of premiums, but just the fixed dollar amount; employees and retirees would have to pick up the difference.

Source: Ryan Huff, "Contra Costa Faces $2.6 Billion Health Bill," Contra Costa Times, March 1, 2007.

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