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Lawmakers scale back Abercrombie's Medicare proposal

By Derrick DePledge

LAST UPDATED: 3:13 a.m. HST, Mar 3, 2011

The state House Finance Committee, worried about legal implications, agreed to end state Medicare Part B reimbursements only for future public worker retirees hired after July.

The committee reconsidered Wednesday night a vote taken on Saturday on a broader proposal that would have contained spending on the Medicare Part B benefit.

Gov. Neil Abercrombie had proposed ending Medicare Part B reimbursements for all retired public workers, which would have saved the state an estimated $41.7 million in fiscal year 2012 and $46.8 million in fiscal year 2013 to help with the state's budget deficit.

The new version of HB1041 passed by the committee, which now goes to the full House for consideration, would not save the state any money until workers hired after July eventually retire.

Public-sector labor unions, and many retirees, objected to the governor's proposal. The state Attorney General's Office also warned that the governor's proposal could invite a legal challenge by retirees who claim it is an accrued benefit protected by the state Constitution.

The House Finance Committee also voted to pass a bill that would freeze the salaries of state lawmakers and executive and judicial branch officials for two years to help with the deficit.

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