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Funding Local Government Health Care is Getting Tougher
(September 28, 2011) National Study Tracks Ongoing Efforts to Trim Employee and Retirees Costs
About 42 percent of the nations' cities, counties and townships expect their revenue to fall again in 2012, according to a national study of over 1,690 local governments across the country. Local leaders are confronting employee health costs to help balance budgets.
"When asked to rate the effectiveness of their efforts so far on a scale of 1-10, the average response was a 5."
According to the Health and OPEB Funding Strategies: 2011 National Survey of Local Governments, the number of local governments setting aside dollars to pay the long-term costs of retiree health care has fallen from 30 percent in 2010 to 19 percent in 2011. In addition, local leaders are using strategies ranging from wellness programs to higher out-of-pocket costs to bring costs under control.
"In a very real way, local governments must choose if they will pay for police, potholes, or pills," said William SaintAmour, executive director of Cobalt Community Research. Cobalt is the nonprofit research coalition that coordinated the national study.
"It's very, very tough to address immediate needs and long-term benefit costs. This report explores how local leaders are striving to do it."
Now in its fourth year, the study report summarizes the ways more than 1,690 city, county, township and special district governments across the country are addressing health expenses as the economy continues to erode revenue levels.
The report finds that:
The report takes a detailed, scientific snapshot of benefit strategies at all levels of local governments - from large counties to small townships. The study was coordinated by Cobalt Community Research, a leading nonprofit research coalition based in Lansing, Michigan.
The study was made possible through the support of the following organizations: Gabriel Roeder Smith & Company, Aetna, the Employee Benefit Research Institute, Gallagher Public Entity & Scholastic Group, GE Asset Management, the Government Finance Officers Association, Ice Miller, the International Foundation of Employee Benefit Plans, Milliman, Munder Capital Management, the Municipal Employees' Retirement System of Michigan and the National Conference on Public Employee Retirement Systems.
The report is available at no cost at www.cobaltcommunityresearch.org/health.
About Cobalt Community Research
Cobalt Community Research is a 501c3 nonprofit coalition with a mission to provide research and educational tools that help schools, local governments and other nonprofit member organizations thrive as changes emerge in the economic, demographic and social landscape. Cobalt provides citizen surveys, school surveys and other specialized research for governmental and membership organizations.
Additional information on health funding, GASB 45 and local government response is available through the following organizations:
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