A conversation re: STRS proposal on HC funding

From Molly Janczyk

Subject: Meuser on McGregor: FW: STRS Proposal

Date: Wed, 28 Jun 2006

Thank you, Mark. I appreciate your thoughts very much. Jim has been responsive since the beginning and has asked to be included. I have appreciated that from him.

Molly J.

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From: Mark Meuser, June 28, 2006

Molly,

I received a copy of your recent e-mail to Rep. McGregor. It was very good.

I know Jim. He lives around the corner from us. He is a great guy, but as he is not on the legislative committee that deals with STRS, he is probably not up to date on all the information.

I thought your analysis of the funding situation was clear and concise. Thanks for clarifying that for him.

Mark

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From Molly Janczyk

Subject: RE: FW: STRS Proposal

Date: Wed, 28 Jun 2006

Dear Jim, Please remember STRS is self insured and pays out over $1.2 - 1.5 MILLION PER DAY for our health care costs. Reductions in salaries, positions, day care, etc. would not dent the outlay for health care. Of course, we continue to be vigilant on those matters and have seen many reductions simply because every dollar should be prudently spent according to ORC:3307.15 and to clear money for any other needed areas. But, this would not pay for HC.

We need a dedicated stream of revenue and this is the only solution to secure HC for educators and attract quality educators to Ohio. I find it alarming when the Boards cite bulk holdings for STRS and simply write off the importance of this issue trying to make the public think there is all this money and all that is needed is to manage better.

They can add as well as any and know this is not the problem. Ohio is long underfunded for education and to continue to ignore this is going to go on seeing education flounder in Ohio. Please examine this area and proposal comprehensively and objectively. Ask those who understand it to speak with you. 5% is the figure which supports the health care fund to be ongoing for current and future retirees. Much research and examination went into finding the figure along with ways not overly cumbersome to educators at .5% per year for school boards and $40 per ck for an average educator. School boards can also trim many the same areas mentioned in your letter for their districts. If we spoke to their bulk dollar amounts it would paint the same picture of them as some of them tried to paint of STRS. To merely quote funds available does not in any way break down costs for the public. IF EDUCATION WAS PROPERLY FUNDED, Ohio educators may not be in this position of having to beg for their promised retirements with HC. There is no retirement without HC.

Thank you.

Molly J.

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From: Jim McGregor

Subject: RE: FW: STRS Proposal

Date: Tue, 13 Jun 2006 11:34:56 -0400

Dear Molly,

Yours is the first briefing I have had on this subject, since I am not on the committee. Perhaps some spending restraint could be added to the bill? Freezing STRS executive salaries, identifying and freezing or reducing executive benefits, eliminating all subsidies for employee day care, requiring protection of STRS resources by reducing the STRS benefits for double dippers, etc. could be explored. We are so thankful for Dennis Leone's and Mr. Lazarus's efforts but the Board still seems not to listen to them thoroughly. Until individuals like them are in a majority on the Board, I lack confidence in the actuarial projections and the Board decision making. I look forward to studying the bill.

Sincerely,

Jim

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From Molly Janczyk, Tuesday, June 06, 2006

Subject: RE: FW: STRS Proposal

Dear Jim How do you stand on the STRS increased contributions legislation? I wonder if Mr. Paessun understands that this is the way to perserve health care for active educators in retirement. He cannot possibly save enough for health care at $240,000 approx. just for premiums and out of pockets at today's costs. This 5% is the number it takes to keep the system up and running now and for future retirees. Careful research was behind this number to convince OEA, STRS and us this would continue health care for all.
2.5% over 5 yrs at .5 a yr is far less than what this educator would have to save for his health care in retirement. Then , of course, I assume he is trying to save for retirement with annuities as well. This would not be attempted if it was not a permanent fix. If STRS becomes healthy again with enough money to fund liability at 30 yrs. so they can devote more

money to health care, STRS can then reduce contributions. This legislation only gives STRS permission to act on contributions. They can also change back if conditions permit.

Please consider all sides before opposing something less costly for all educators. Retirees have borne up to 800% increases in a few years to keep the system going. This just makes it work for actives facing retirement as well. I went from $31 for myself and spouse when I retired in '99 to over $800 in 2007 (predicted) just for premiums. Then 20% of all costs after $500 deductibles for each of us.

.5% is $40 a check based on an average $40,000 salary. Calculate what you will have to save to pay for your health care in retirement. There are no guarantees in life, but this is the closest you will come. Research this legislation, consult your fellow educators who know the facts, go onliine : www.strsoh.org to see the proposal.

Thank you,

Molly Janczyk

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The list you provide below will take much time and by then many educators will live in desperation. Perhaps he is young.

Thanks,

Molly J.

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From: McGregor, Jim, June 06, 2006

To: 'Mark Paessun' Subject: RE: STRS Proposal

Dear Mr. Paessun,

Thank you for your concern. It is a difficult problem but I think that there is a solution, though it is incremental and difficult. I agree that the system cannot keep leapfrogging the costs onto teachers and retirees. At the same time, teachers and retirees are tax payers and do not want their taxes increased. There are alternatives.

1) Ohio needs to expand the scope of practice of all medical professionals to take advantage of their full education and capability. Today, laws artificially limit Naturopathic Medical Doctors, Advanced Practice Nurses, Physician Assistants, Nurses, Dental Hygienists, and a host of other professionals. These restrictive laws drive up the cost of care. The Legislature has made some changes but needs to go much further.

2) Ohio needs to limit the salary and benefits of non-profit Hospital executives. Hospitals, receiving public funds, are paying a host of executives million dollar annual salaries and luxurious benefit packages while calling themselves non-profits. Greed has become endemic and the Legislature needs to act. Salary restrictions need to be applied by law to the public retirement systems also.

3) Ohio needs a basic health care plan; one that meets our needs but will not afford our desires. Cosmetic surgery, defensive medical practices, and recreational drugs all need to be eliminated from the plans we have. We need to study capitation and come to mutual conclusions of what we need and can afford.

4) Ohio needs to study end-of-life issues and reach conclusions. Many today have their lives extended against their wills and to their great pain and anguish. I do not support euthanasia but neither do I support extending life through elaborate machinery and/or drugs when the patient does not desire such extension.

These, and other tough issues, need to be faced head on. May God grant us the courage to do so.

Sincerely,

Jim McGregor

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From: Mark Paessun, June 06, 2006

Subject: STRS Proposal

Dear Mr. McGregor,

I want you to know that I am adamantly opposed to the proposal by the State Teachers' Retirement System to increase employee contributions by
5% (2 ½% for the teacher and 2 ½% for the district). Simply put, STRS must look elsewhere to solve this problem.

In my district, we took reduce health care benefits by shifting more of the cost to those who use it most. Why can't STRS do this? Why should I subsidize health care for retirees and their spouses when that money is being spent today? At the same time, STRS tells me to save for my own retirement health care because I'm going to need a lot of money to pay my part then.

STRS will tell you that they have held state-wide meetings and solicited input from all stakeholders. Their data are skewed. The only people who can afford the time to go to all those meetings are the retirees. The voice of the current retirees is being given too much weight.

This proposal will take money out of my check that I need to be saving for my health care when I retire. STRS is a retirement system. They are not required to subsidize health care for retirees or their spouses. If the money is tight, let them do what they are supposed to do - be a retirement system. I realize that there is no simple answer to the rising cost of health care, but the throw-money-at-it technique is short-sighted and unfair. What is STRS going to do when as costs keep escalating? Keep coming back to me for more? I only have so much to give. Who will be there to subsidize my health care?

Sincerely,

Mark Paessun

Teacher (22 years)

Whitehall City Schools