Federal retirees are banking on Senate-House conferees to protect them from paying an extra $500 or more a year for catastrophic health insurance that most of them already have.
Both the Senate and House have approved plans for a national catastrophic health insurance protection program under Medicare. It would cover retirees -- both federal and private sector -- who are 65 and older. The House financing formula would force federal retirees -- who already have such protection under their government health plans -- to pay up to five times more than some nonfederal retirees.
The Senate version would equalize premiums for everyone.
Differences in the two bills must be ironed out by a conference committee. It now appears that the conference may not take place until early next year.
Despite the prospect of some relief, and the likely delay in final action, many U.S. retirees are panicked (and outraged) at the prospect of paying more for duplicated coverage.
Under the House plan, the coverage would cost a typical person whose benefits come mostly from untaxed Social Security an extra $120 a year. But people who get most of their income from taxable annuities would pay an average of $530 more a year under the House version.
To relieve the situation, the Senate wants an income-based system that takes into account the taxability of most pensions. It would require the government to charge retirees who have catastrophic coverage lower insurance premiums.
Because of the hue and cry raised by retiree groups and federal and postal unions, there is a good chance the more moderate Senate version will prevail. In the meantime, concerned retirees should monitor the situation carefully but also be aware that any final decision is likely to be months down the road.Lump-Sum Lobby
Federal workers concerned about the tax status of lump- sum pension payments will hold a Dec. 1 meeting to decide whether they want to take the case to court. Currently, federal workers upon retirement can take a lump-sum payment equal to their contributions to the civil service retirement fund. For some retirees that lump-sum payment could exceed $50,000.
The new tax reform act considers those payments as regular income. That means that up to 95 percent of the amount of the lump-sum payment is taxable. Many federal workers contend that this amounts to double taxation because they already paid taxes on their retirement plan contributions while working.
The Senior Executives Association wants to see whether there is sufficient interest -- and financial support -- for a lawsuit by retirees who already have received the lump-sum payments. For information call project coordinator Bert Silver at 424-5213. People
Jerry Klepner will soon join the American Federation of State, County and Municipal Employees as chief lobbyist. With 1.1 million members, AFSCME is one of the fastest growing unions. Klepner is now with the consulting firm of Anderson, Benjamin, Read & Haney. Before that, he was staff director of the House Compensation subcommittee of the Post Office and Civil Service Committee and legislative director for the National Treasury Employees Union.