School retirement systems facing massive growth in health care costs

In 2006, the State Teachers Retirement System (STRS) "covered an average of more than $4,200 in health-care costs per retired teacher, an increase of more than 20% from 1998 levels." Overall, the STRS's health-care bills soared from $259 million in 2001 to $490 million in 2006. (Source: "Health costs hurt pension systems," Columbus Dispatch, Nov. 26, 2007.) The School Employees Retirement System has seen the same trend, with non-teaching school employees drawing an average of more than $3,700 in health-care costs from their pension system. According to leaders of both systems, if the trend continues it could bankrupt the pension systems' health-care funds, with the STRS possibly running out of "money to cover health-care expenses of retired teachers around 2021."

The article states that new and better prescription drugs and longer life spans are behind the increases. "Officials with the teachers' pension system want teachers and school districts to dig a little deeper into their pockets to cover the rising expenses. That idea has run into stiff opposition from school districts, who say it will hurt students by diverting money from the classroom."