Report: $20 Billion Health Care Burden Could Crush Towns

BOSTON (CBS/AP) – A new report says the 50 largest communities in Massachusetts face a “staggering” $20 billion unfunded liability for retiree health care benefits.

WBZ NewsRadio 1030’s Carl Stevens reports

The nonpartisan Massachusetts Taxpayers Foundation, in the study released on Tuesday, said the liability threatens to wreak havoc with local government and place crushing burdens on property taxpayers in the future.

“If these benefits aren’t reigned in in some way, (it) means one of two things: that services will continue to be cut for cities and towns and/or that the finances of these cities will just hit the wall and they’ll go effectively bankrupt,” Foundation executive director Michael Widmer told WBZ NewsRadio 1030.

The foundation says the $20 billion estimate is likely understated given the steep rise in health care costs.

The report says the unfunded liability for health insurance is about 2 1/2 times greater than the more well-publicized unfunded pension liability.

The foundation recommends several actions, including giving local officials power to adjust health plans outside of collective bargaining.

(TM and © Copyright 2010 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

More from Carl Stevens
Comments

Leave a Reply

Fill in your details below or click an icon to log in:

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More From CBS Boston

Summer of Savings
Download Weather App

Listen Live