Projected Medical Costs. The present project cost of medical benefits through the death of the last LEOFF I member is estimated at $672 minim That figure equates to $76,000 for each of the current 8,872 LEOFF I members. That is, if this amount of money was invested in 1994 for each LEOFF I member, their employers would have sufficient funds to coverall future medical costs for the present 5,396 retired for service or disability and 3,476 active members.

The overall projected $672 million cost figure equating to $76,000 per individual member is based on the assumption that retirees pay their Medicare Part B premium.

The impact of Medicare is significant in medical claims payment for retirees age 65 or older. Cost to the employer who does not take advantage of the payments under Medicare Part A and Part B is an additional 209 percent. If the employer opts to pay the Part B premium for its eligible members, cost for those members would increase 22 per¬cent, but the expected claims would be reduced from 25 percent to 33 percent.

Employers Surveyed: In conducting the survey of 261 employers of LEOFF I active and retired members, to obtain information for the actuarial study, the number of employers were reduced to a representative sample. Selected were 99 employers consisting of 24 counties, 49 cities, 21 fire districts and the 5 miscellaneous districts.. However, 29 of the surveyed employers failed to respond or in few cases returned their survey but too late for inclusion in the actuarial study.

County employers not responding or too late were: Benton, Columbia, Pend Oreille, Skamania, and Spokane. City employers not responding or too late were: Bellevue, Bremerton, Everett, Long Beach, Marysville, Oak Harbor, Pasco, Redmond, Ritzville, Soap Lake, Spokane, Tenino, Vancouver, and Wenatchee. Eight of the first districts failed to .respond as did 2 of the special districts.

Other first class cities surveyed and returning their survey were: Aberdeen, Bellingham, Richland, Seattle, Tacoma, and Yakima. Larger counties responding were: Clark, Grays Harbor, King, Kitsap, Pierce, Snohomish, Whatcom, and Yakima.

Survey Questionnaire: The questionnaire contained a basic set of questions used in each version and addressed the following areas of concern:

1. Employer Profile. Pertained to employers, retirees, salary and budget information for use in placing medical costs in context rather than for actuarial purposes.

2. Medical Coverage. Questions were asked to learn the extent to which LEOFF I retirees are being covered under Medicare.

3. NursingHome/Long-Term Care. These questions were aimed at learning whether the LEOFF I nursing home Medical benefits were covered by present insurance, and current extent and level of long term care among LEOFF I retirees.

4. Direct Costs for Medical Benefits. This set of questions sought the amount of non-insured costs experienced by the LEOFF I employer.

5. Pre-Funding and Measurement of Retiree Medical Benefits Obligations. These questions sought to find which of the first class cities had used revenues available to them because they had pre-LEOFF retirement systems.
available to them because they had pre-LEOFF retirement systems.

Nursing Homes: In response to the question, "How are nursing home! long term care benefits provided to your LEOFF I retirees; insurance plan or self-insurance?, 50 employers responded that they self-insure and 12 employers responded they provided long term care through insurance.

Liability: The stated goal at the outset of the study was to determine if mandated LEOFF I medical benefits pose a serious financial liability to political subdivisions statewide. After reviewing the results of the actuarial valuation it is determined that, although significant, they will not pose a serious additional problem or. a statewide basis. This does not mean, however, that some individual employers may not face serious fund outlays, particularly due to long term care admissions.

The Expected Post-Retirement Benefits Obligations for both medical and long term care are projected to be $672 million. Viewed simply as a single payment, it appears quite large. But this number represents the total expected obligation for which, until the death of the last retired member, the LEOFF I political subdivision employers statewide are responsible. Applied to the 256 LEOFF I employers, this equates to approximately $2.6 million each, spread over 20 years. On a per capita basis, the Expected Post-Retirement Benefits Obligation is approximately $76,000 per LEOFF I member.