Today’s Managing Health Care Costs Indicator is $812 million
Today’s Boston Globe reports that universities are struggling with their obligations to their retirees, just like local and state government. Historically, pension obligations were far larger than retiree health obligation, but that has recently changed. In fact, this year they are about equal for Harvard University.
Think about this for a moment. Post-retiree health obligation is merely to pay for what is not covered by Medicare for retirees over 65, yet the cost is still higher than the cost of pensions! Increases in the cost of pension and retiree health care ($35 million) exceeded the salary costs shed by Harvard as it began its painful austerity program last year ($31 million).
Harvard University’s current post-retiree health obligation is $812 million.
This is further evidence that we really must lower the inflation rate of health care, or we will continue to suffer cuts in other areas vital to our future.