Riverside County supervisors are poised to slash $354 million from county spending over 20 years by raising the health-care premiums of early retirees.

The rates for 834 retirees who buy their health insurance through the county could increase between $175 and $756 per month. The new rates would go into effect in January if county supervisors adopt the plan Tuesday.

Human Resources Director Ron Komers said the county must move to contain costs that are expected to skyrocket as baby boomers move into retirement and post-employment benefit liabilities mushroom.

Komers, who is proposing to cut county health-care subsidies for early retirees, said the average premium would increase by about $200 per month.

A handful of people would see monthly premiums escalate by $756, he said. Komers' proposal includes a "soft landing" subsidy of $100 and $200 through 2011 or until a retiree reaches 65, when they are eligible for Medicare.

The number of employers with more than 200 workers who offer retiree health-care benefits has fallen from two-thirds in 1988 to one-third in 2005, according to a study by the Kaiser Family Foundation.

Early retirees, or people who leave a job before 65, are the most vulnerable group if they lose or no longer can afford their premiums, said Michelle Kitchman Strollo, principal policy analyst for the Kaiser foundation.

"So many people at that age, perhaps with multiple health conditions, could be priced out of the individual market. That's why retirement health-care benefits are so coveted," Kitchman Strollo said.

Supervisors Chairman Bob Buster, said the county's "fairly lavish pension system" has stimulated early retirements and contributed to the county's rising cost of health care.

"It's something we have to begin to change. We are trying to cushion any blow to those who have retired or are close to retirement. People in the future will need to be more fiscally prudent and do more planning and saving," Buster said.

By taking some of the luster out of the county's "gilt-edged" system, Buster said more employees are likely to stay in the work force longer, "and that's a good thing."

Early retirees who cannot afford the increase could end up relying on the county's indigent system for medical care, which is not the cheapest way to provide care, said Arleen Leibowitz, Professor of Public Policy at the UCLA School of Public Affairs.

"Everyone is being clobbered by these very large health insurance premium increases," Leibowitz said. "Having a uniform system that covers everybody and where resources are not wasted is the solution."

County leaders are continuing to look for ways to offset the costs of retiree health-care benefits, said county Treasurer Paul McDonnell, chairman of the county's Pension Advisory Review Committee.

While pension bonds have saved the county $38 million in the past 18 months, McDonnell said officials are monitoring pension reform efforts at the state level to see how reforms will affect employees' future.

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