States face $555 billion in unfunded health care costs for retirees, and many states are working to cut their debt. Many states have cut benefits for future retirees, and others are pushing for cuts for those who are retired now. States say that they cannot afford to cover all or most of health care costs as budget deficits and rising health care costs loom. Some unions are criticizing the attacks on health care, saying that they have given up many other things for health care benefits, and they deserve to keep them. While states cite studies that show the difference in benefits between the private and public sectors, unions have others that show overall compensation is lower in the public sector. As budgets are announced, the changes to health care are one of the main issues for unions and the states.
See "States Aim Ax at Health Cost of Retirement", Steven Greenhouse, The New York Times, February 14, 2011