Dr. McKalip Calls for Common Sense Reform of Government Worker Benefits to Protect Workers and Taxpayers. Politicians Continue to Pander for Votes.

OPEBHealthbenefitobligation2012The City of St. Petersburg apparently has decided that they should limit what doctors city workers see based on politics.  It was reported in the Tampa Bay Times* today that the city has decided it will not allow city workers to see this author, Dr. McKalip, because I am also a candidate for City Council.   The pandering politicians are piling on with Council Member Gerdes offering that I would not be a “prudent choice” as he inaccurately claims that I do not want “any benefits” for city employees (something I have never asserted).  Well, it appears there is one party playing politics with the lives of government workers, but it is certainly not me. (LEFT:  the city has saved no money for retiree health benefits. It owes $177 million and is spending over $40 million per year at an ever increasing rate, raising taxes to do so).

The story fairly cites that I have expressed significant concern about the unfunded pension and health insurance liabilities of the city. I have not blamed this on the government workers. I have placed the blame for this continued economic catastrophe of the city’s benefit plans squarely where it belongs: on the shoulders of a long series of politicians and elected officials who have refused to address these issues. As it stands now, there is a $177 million unfunded liability for health insurance costs of retired workers. There is NO money saved for those benefits. In addition, the pension benefits are funded at about the 85% rate and the amount “saved” is based on the assumption that they will grow their actual (but unknown) savings at a rate of 7.75-8% annually. That is, of course, ridiculous over the long term.

AnnualStpetepensionexpenseFor too long, City Politicians have refused to address economically unsustainable government worker benefits. They need reform to protect those benefits for workers and protect the taxpayer from undue burden and the possibility of a city bankruptcy as in other cities .

 Here is the way I have put it here on this blog:

Government workers are NOT the ones to blame primarily. The blame falls on the shoulders of years of politicians who have kicked this can down the road all in the name of getting re-elected. The city needs to immediately convert to defined contribution plans for new hires and work on re-negotiating contracts to convert current plans owned by the governments to plans owned by individual workers. The workers should be offered the opportunity to take a lump sum payout at a lower value than the over $800,000 amount promised for their retirement. It is clear that those amounts can’t be paid for and it is unfair to tell courageous firefighters and police officers and standard government workers that they will have a pension that can’t exist in reality in the future. The unions need to step up to the plate to prevent an economic catastrophe for the city. There are no amount of taxes that can be raised to solve this problem. It is time for some tough but realistic decisions before the City of St. Petersburg also has to declare bankruptcy”.

The politicians like to pander to gain office and they have long done so by giving out unaffordable and economically unsustainable benefits to government workers. That may have been necessary in the day when government workers earned less than private citizens. However, the City of St. Petersburg pays wages and benefits ($75,000) to city workers about three times the median income of average St. Petersburg residents

.  Furthermore, St. Petersburg city workers enjoy 75% funding for the health insurance premiums of their family members while most employed people in St. Petersburg pay for the insurance of their family workers out of pocket.  These facts will be further exposed and explored at my campaign website in the coming weeks.

These are some of the ideas I have offered for necessary benefit reform here in the past:

The city needs to change its approach for these benefits in many ways. Here is a better way forward for the city of St. Pete.

1. Modify the current health benefit plans to Health Savings Accounts with High Deductible Health plans. This is a low premium, high value plan that puts cash in the hands of insured folks (both current and retired) so they pay the first few thousand dollars of their health care every year. That will help patients shop for better medical care when they are healthy and have time. When they reach the maximum out of pocket, 100% of costs will be paid. Nearly all common preventatives services are paid for in these plans. Pay a much lower subsidy to those who enroll in Cadillac benefit plans.

2. Re-negotiate union contracts. Advise the Police and fire Departments that they will need to accept a much less generous health retirement benefit in the future for all future workers. Offset some of this with a pay raise so these workers can save for themselves for their future health insurance needs.

3. Adjust all non-union benefits. For workers that are not unionized, make the tough decision that the city can’t afford to pay 75% of the health care benefits for retired workers and their family members. Give a pay raise to offset this so that the workers can save for their own future health insurance needs.

4. Adjust retirement ages. Most workers aren’t assured the luxury of retiring at age 50 after only 10 years of service. While certain labor intensive jobs may justify lower retirement ages, some adjustments up at least five years seem very possible.

The Taxpayers can’t bear these overly generous benefits any longer. It is time for a real change that will keep our city from going bankrupt like so many others in the country. It is time for a change that will not provide special treatment for government workers at the expense of the people they serve. In other words, it is time for some common sense for our City Budget.

 *The story cites the case of a Bradley Westphal who won a major case in court this week when he had a portion of the Workers Compensation law reversed that limited benefits. Mr. Westphal was quoted in the story indicating that I was his doctor, stating he was satisfied with my care and then wondered aloud if my plan to run for City council influenced my medical decision making. As a doctor who respects that patient-physician relationship, I am at a disadvantage to respond since I won’t even acknowledge if such a relationship occurred without the consent of my patient. However I will offer here that I have a well known history of fighting against insurance companies and workers compensations benefits managers who seek to deny care to their patients. I also would never make a decision affecting the care of my patient for any political reason and have never done so

2 Replies:

  1. Deb Caso

    To my knowledge Dr McKalip is an honorable dr. I believe his analysis of personal savings accounts is right on.

    It is amazing that St Pete can build a green city on tax funding , push the transit oriented redevelopment on tax funding looking as far ahead as 2050 but didn’t figure how they would fund city workers medical plans that will be needed forever.

    When you don’t have the money, something has to be done and I believe Dr McKalip has a great idea!

    As to the politics , TBT wouldn’t ever give a good word on anyone that is not a flaming liberal. Even when Mr Welch sold the taxpayers a deadbeat deal with Sweetbay, the sheeple won’t wake the flock up.

    I pray you get on the City Council Dr McKalip. Common sense has got to take the day. Keep up the good fight!

  2. Bill

    While I do not agree with Dr Mckalip on most issues I believe the council is wrong to not use his services as a doctor. He took an oath as a medical professional which he upholds everyday. If someone from the city wants to use him they should be able to. I feel the Doctor will not make a political issue of this.

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