San Angelo council votes to pass $13.52 monthly increase for post‑65 retiree Medicare plan
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Summary
City council approved a 4.18% plan increase that will be passed to post‑65 retirees as a $13.52 monthly premium rise after extended debate about long‑term fund solvency and the city’s obligation to retirees.
The San Angelo City Council voted 4‑2 on Oct. 21 to pass a 4.18% increase to the city’s over‑65 Medicare Advantage plan, with the $13.52 monthly rise passed to retirees rather than absorbed by the city.
Council members debated the recommendation after Human Resources Director Veronica Sanchez presented funding details for the post‑65 plan. Sanchez told the council the city solicited bids and selected Humana; the negotiated renewal reduced an initial 9% quote to 4.18%, representing an annual cost increase staff estimated at about $62,000.
The increase will raise the retiree premium by $13.52 a month, to a total monthly retiree premium of $33.96, and the council approved passing that amount to the retiree group. The HR director told the council that the city previously covered a roughly $500,000 cost two years earlier to keep retiree premiums unchanged when market prices spiked.
Council members who opposed shifting the increase to retirees said the city had made a longstanding commitment to cover retiree health care and that some retirees subsist on small pensions. Supporters of passing the increase to retirees said the self‑insurance fund faces an unfunded liability staff estimated between $3 million and $6 million and that preserving the fund’s solvency required shared cost adjustments.
Veronica Sanchez provided enrollment and cost context: about 330 post‑65 participants are covered by the plan, with roughly 278 in the tier that receives the current $20.44 employer contribution; the city’s total current spend on the over‑65 benefit is approximately $1,500,000 annually. Sanchez and other staff recommended the modest premium change as the least disruptive option for the coming plan year and said staff will revisit plan design options and shop the market for future years.
Retiree representatives urged the council to honor previous commitments. Russell Smith, a retired police chief who addressed the council during public comment, said city employees accepted lower wages years ago in exchange for promised retiree benefits and warned about the hardship even a small monthly charge can cause for low‑income retirees. Judge Alan Gilbert and other longtime retirees told the council that $13 monthly can be meaningful for many beneficiaries and asked that the council preserve the benefit.
Council members signaled that next year they expect to revisit the benefit structure and consider options such as tiering or changing plan benefits to reduce city cost exposure, but they stopped short of approving changes now. City staff said they will analyze alternative plan designs and return with options that balance retiree benefits and fund solvency.
The motion to increase the retiree share by $13.52 per month was moved by Mayor Tom Thompson and seconded by Council member Harry Thomas. The roll call vote: Mary (nay), Karen Hesse Smith (nay), Patrick Keeley (yea), Harry Thomas (yea), Tommy Hebert (yea), Tom Thompson (yea). The motion passed 4‑2.
Council members and staff said the issue will remain on the council’s agenda for further study as they consider long‑term budget and benefit choices affecting active employees, retirees and the city’s self‑insurance fund.
