After being approved to continue with its bankruptcy earlier this year, the city of Detroit and its major unions have reached a deal which would cut retiree health care coverage, one of the city?s biggest expenses. The cost of that coverage was almost $6 billion dollars. The deal does not change pension benefits, which are a separate issue as far as the debt restructuring is concerned. Pensions also hold special protections under Michigan state constitution. The deal, which will go into effect on March 1, will give each retiree a $125 stipend per month to purchase their own health insurance. As of Friday, all parties involved in the negotiations have said that they would not challenge the legality of the agreement, but other stakeholders may yet come forward.
See "Detroit reaches deal on retiree health care", Chris Isidore, CNN Money, January 30, 2014