Angry retired educators packed a Shelby County Board of Education forum Monday night to protest proposed changes to their health insurance plans designed to help the district pay down a looming $1.5 billion debt.
Hundreds of retirees attended the forum, and dozens spoke. Their message: The district’s cost-cutting ideas are misguided, life-threatening and disrespectful to teachers who dedicated decades in the classroom with the expectation that they would be adequately medically insured for the rest of their lives.
“Had I known what we’d be talking about at this point, I wouldn’t have retired,” said Ed Riddick, 63, a 37-year employee. Riddick retired from Arlington High School to care for his sick spouse because he thought his medical insurance would adequately cover her. He said the prospect of navigating massive changes in his family coverage is frightening. “Changing out of the Cigna plan is like jumping off a cliff without a parachute,” he told the board.
District leaders are exploring ways to reduce retirees’ non-pension benefits by, among other things, cutting retirees’ spouses from the plan, switching retirees to a state plan, or giving retirees cash to shop for their own insurance.
“We all worked our rears off for years,” said Bob Cannon, 79, a 30-year employee. “I love this place and I gave my life to this place. … I’m an old man … and I want some insurance.” Cannon said that, when he went to work for the former Memphis City Schools, he was told that insurance was the best feature of his benefits package. Cannon said he needs good medical insurance to cover three people in his family, including his handicapped daughter.
“This is the first time I’ve ever been grateful that my husband died of cancer before now,” said Susan Goodman, 69, who worked for 30 years in several districts throughout the state. “This is an incredibly hideous thing that could happen at the end of their lives. Many people have given their lives for the county, for the city, for the schools, and are now being treated so incredibly horrible.” Goodman is relying on medical, visual and dental coverage to help care for her disabled adult son.
Board members told retirees they will consider the feedback of those impacted by the changes and reminded them that they have not made any changes to health plans at this point.
State legislators and county commissioners have warned that the financially strapped school district could go bankrupt if it fails to pay down its debt in the near future.
The debt grew over time after the self-insured district, which is the result of a 2013 merger between Memphis City Schools and the former Shelby County Schools, repeatedly paid for medical costs as they arose rather than pay the “actuarial” costs of the plan, which administrators estimate at $125 million a year. Currently, the district spends about $30 million on its retirement health care plan.
Goodman said the board has not adequately explained options offered by the district and complained that many teachers are confused.
Last month, at the request of the board, administrators presented several options that could reduce the annual actuarial costs, including:
- Writing retirees a monthly check for $10 for every year served — to go toward private insurance or insurance purchased through the federal Affordable Care Act — reducing the debt by about $430 million;
- Switching district employees and retirees to the state’s employee health insurance plan at a cost savings to the district of $233 million. Administrators said the state plan provides better benefits than the district’s current plan. A switch would have to be voted on and approved by a majority of the district’s 10,000 employees;
- Cutting all retirees’ benefits in 2020, reducing the district’s debt by $255 million;
- Cutting district spouses from the plan, at a cost savings of $166 million.
Administrators are asking current teachers and retirees for feedback on insurance coverage options outlined on the district’s website.