CHICAGO — Detroit retirees filed a lawsuit asking the federal bankruptcy court to block the city's new health insurance plan that critics say will be devastating.
The lawsuit was filed Jan. 9 by a coalition made up of a court-appointed committee that includes 23,000 retirees as well as a chapter of the American Federation of State, County and Municipal Employees.
It's the second time the group has sued to block the city new plan, which would shift older retirees to Medicare and the younger ones to buy health coverage on the state exchange under the new federal law.
The city would provide a $125 monthly stipend to buy health coverage. The plan would reportedly cut the city's annual retiree costs to $30 million from $180 million.
Emergency manager Kevyn Orr first unveiled the plan in October. He has since agreed to delay implementing the new plan until the end of February.
"The impact of the city's decision on the retirees will be devastating," the lawsuit said. "Because significant health concerns, and possibly life and death issues, are created by the city's actions, monetary damages are insufficient to compensate the retirees for the city's breaches."
Orr two weeks ago unveiled a plan to freeze the city's two pension funds and shift employees into a new 401(k) style plan. He later reversed the decision, saying he would negotiate with the pension funds in mediation to try to reach an agreement.
