Retirees Call Out "Ludicrous" Budget Explanation

ALBANY, NY (01/27/2016)(readMedia)-- Edward C. Farrell, Executive Director of the Retired Public Employees Association (RPEA), today slammed Governor Cuomo's estimate regarding the impact of capping the standard Medicare premium reimbursement of the New York State Health Insurance Plan (NYSHIP) as "ludicrous".

Farrell stated, "The Governor's Briefing Book on the Executive Budget states that capping the reimbursement at $104 per month would affect 4,647 retirees and dependents in the 2016-17 fiscal year and 34,000 in the 2020 fiscal year. These estimates are ludicrous and are premised an inaccurate assumption. The reality is that all 145,000 Medicare eligible enrollees in NYSHIP will be impacted in the future, as the basic premium has already increased."

After the enactment of the federal budget reconciliation legislation last fall, Social Security raised the basic premium from $104 to $121 per month. Due to the very unusual fact that there was no cost of living adjustment (COLA) for social security recipients in 2016, a quirk in federal law froze the $104 premium for the vast majority of recipients for this year alone. If there is a Social Security COLA next year, then the new higher premium would apply to everyone. Rates could also increase in future years.

John McPadden, RPEA President, added "The fact that there was no Social Security COLA in 2016 is a very unusual occurrence, as this is just the third time in 45 years that is has happened. It is most likely that there will be a COLA next year, and if the Governor's proposal were to be enacted, NYSHIP retirees would be capped at an outdated reimbursement rate and forced to pay an extra $30 million a year. We call upon the Senate and Assembly to reject this ill advised proposal."

Farrell concluded "The implications stated in the Governor's budget presentation are so out of line that they can be deemed fiscal chicanery."


Editor's Note: The facts stated to this matter can be found in the Executive Budget Public Protection and General Government Article VII Legislation – Memorandum in Support- Park K, Pages 17 and 18