Health Care Crisis Coming

The New York Times has a story up this morning entitled, The Next Retirement Time Bomb. It details how the Government Accounting Standards Board is now going to require governments to include on their balance sheets the heretofore off-balance-sheet liabilities for health care for retired employees. The picture is not going to be pretty, as the Times points out.

The board has issued a new accounting rule that will take effect in less than two years. It has not yet drawn much attention outside specialists' circles, but it threatens to propel radical cutbacks for government retirees and to open the way for powerful economic and social repercussions. Some experts are warning of tax increases, or of an eventual decline in the quality of public services. States, cities and agencies that do not move quickly enough may see their credit ratings fall. In the worst instances, a city might even be forced into bankruptcy if it could not deliver on its promises to retirees.

"It's not going to be pretty, and it's not the fault of the workers," said Mayor Bergson, himself a former police officer from Duluth's sister city of Superior, Wis. "The people here who've retired did earn their benefits."

It's getting pretty clear that our system of employer-based health insurance is no longer workable -- if it ever was. When are our leaders going to begin to wake up?