Who wins, who loses? A look at issues facing retirees

By William H. Stewart
Special to the Saipan Tribune

Last of two parts

One would hope that, before recommending privatization of the Retirement Fund’s medical and health plan, government officials should check with the Commonwealth Health Center to learn the approximate number of members who either presently have a non-qualifying disability or illness—or a propensity (often family history) to contract one and thus may not be able to purchase medical insurance from a private company even at a high cost. This will require a measure of research but the stakes are high and it should be done. Members of the medical and health plan deserve to know.

Such an analysis may even have been implied under section 8 of the Actuarial Study Mandate. A review of the available records for each of the above medical conditions in the Commonwealth as related to the population cohort and that particular group’s estimated life span should reveal a reliable estimate as to their impact on any medical and health plan. CHC’s records should provide a convincing statistical point of departure for such an analyses. It is already known that many times the above conditions often result in a diminished life expectancy.

I’m no attorney, but considering the litigious nature of the society, I will hazard a guess that failure to make an evaluation as suggested above might well eventually lead to a lawsuit by some aggrieved employee or retiree who was deprived of the right to obtain medical insurance. It won’t be me since I don’t have any medical problems—yet.

Some indication of the size of this group can be examined in the census of population for the year 2000. At that time the population age 5 to 20 years with a disability numbered 834; those age 21 to 64 years totaled 7,898 and those age 65 and over with some form of disability numbered 536. Of course, these figures represent the entire population and not just those within the Fund’s medical and health plan, but these data are indicative in suggesting that there may be a considerable number of retirees that could be excluded from any privatization plan. It is unlikely that nonresident workers will significantly impact the above totals since, if they had a disability, most likely they would not be working in the CNMI.

Can CHC absorb the cost of caring for people who can’t pay but by law they are still required to treat? Refusal to treat might result in still another lawsuit.

And what about the people who can only make the co-payment for medicine? As I understand it, the hospital pharmacy is not required to give free medicine. As an example of some costs without prescription insurance, a popular blood pressure medicine that costs $12 as a co-payment would be $54 without; high cholesterol lowering medicine with co-payment is $14 and $68 without insurance.

A related question should be posed to CHC officials to provide their best estimate as to approximately how many retirees would drop out or otherwise decline to participate in a private health plan and therefore seek free medical treatment for themselves and their dependents from the hospital. What would this cost likely to be and who will ultimately be expected to meet the expense? The Commonwealth government or the American taxpayer by way of the Department of the Interior?

It seems to me that the board of trustees should continue to be advocates for the retiree’s status quo and strive for even better retirement benefits. If they aren’t, then who speaks for the retirees?

Concerning the CNMI government’s contributing payment obligation to the Fund (which I understand is in default), on Feb. 2, a Retirement official was quoted as stating: “The situation is understandable because the government has been paying ‘way too high‚ for retirement contribution. It’s really hard for the government to do that.’

On March 29, the same person was quoted as stating: “Health insurance privatization may mean higher premiums. Everybody that is presently in the program will be carried—If you don’t want to pay, then you’re out of the program.”

Both comments cited above have enlisted responses from several members within the retirement community expressing alarm at what some may take as a cavalier attitude regarding the welfare and future financial security of all members and their dependents. That single objective should simply and exclusively be the superior, long-term interest of some 9,000 members and their dependents.

By the way, if you ever drop out of the health plan, you can never get back in. Why? I don’t know, but that’s what I have been told.

Some years back, Retirement Fund officials themselves recommended that the administration’s contributing share be increased and at that time provided convincing backup data to support their position. The CNMI government agreed and each department was instructed to include the increase in their budget submission.

No one forced the government to enter into an obligation to contribute a certain amount to each employee’s individual retirement. My guess is that the Legislature decided to enact such a policy into law as an incentive to recruit and retain employees in service to the public.

In my opinion, Retirement officials should first and foremost look after the welfare of retirees and those currently paying into the Fund and spend less time and concern about the condition of the CNMI government’s finances. Why do I hold this belief?

Examine how the government spends taxpayer money, which the local news media covers almost on a daily basis and, in other instances, how the government doesn’t expend funds that should be applied to paying many of its bills.

There have been many statements to the public as to how the administration has cut costs, reduced hiring, developed plans to increase revenue and improve the economy. One would think some of the savings realized could be shared with the Retirement Fund in the form of paying the amount owed to each and every employee by reason of the contract which all signed with the government. All were contractual agreements binding on both parties.

By not paying its contributing obligation to the Retirement Fund, money is “freed-up” for use by the government to pay consulting fees, shopping mall maintenance and many other lavish expenditures. By not paying what it owes CHC, CUC and a host of private vendors, etc., a great “slush fund” is available to the government, part of which is the money of Retirement Fund members being misdirected from the member’s retirement account for use elsewhere.

You tell me—who wins and who loses?

(William H. Stewart is an economist, historian, and military cartographer.)