Swift, who had targeted the funds during the FY'03 budget debate this past summer, used her executive powers to unilaterally cut the money from the existing GIC budget. Under the state constitution, the governor has the legal authority to cut state spending if it is determined that a deficit exists.

As the Massachusetts' economy worsened, state economists predicted a $500 million deficit for the current fiscal year (FY'03). Calling on the need to "close the budget gap", Swift used her statutory "9C" powers to trim $200 million from the budget. The single biggest cut came in the form of the Medicare monies eliminated from the GIC.

"Once again, the acting governor has wrongly targeted the Medicare refund in an attempt to balance the budget. The Medicare refund is not a giveaway program, but rather a long-held obligation of the state to pay its share of retirees' insurance," explains Association President Ralph White. "This cut represents a $648 increase in Medicare retirees' insurance costs. If there is a budget deficit, it should not be balanced on the backs of retirees living on fixed incomes."

Since the legislature was no longer meeting in formal session when Swift eliminated the Medicare refund in October, there is no opportunity to restore the $28.8 million before the session ends in January. In order to reappropriate the money, the Legislature will have to meet in full-formal session.

"The delay in official legislative action does not mean that we are sitting by waiting silently," said Association Legislative Liaison Shawn Duhamel. "To recover $28 million during a recession is not going to be easy. We have started to educate legislators as to the facts behind the refund and of its importance to our members.

"No one has forgotten that retirees got short-changed this past summer when the Medicare refund was reduced. Our legislative team is still lobbying for the $5 million needed to give a 100% refund for FY'02. However, with a veto from Swift a near certainty it is unlikely that we will be able to obtain the money before the session ends."

Moving into the next session, which begins on the first Wednesday in January, Association lobbyists will be working closely with legislative leaders to restore the funds. With a new Administration taking over the corner office and a new Senate leadership team in place, the stage has been set for a new approach to dealing with the state's fiscal problems.

For public retirees, one of the most upsetting aspects of the fight surrounding their health care coverage has been the mischaracterization of the Medicare Part B refund by Swift. For years, the state has been refunding to retirees what they have had to expend, out of their own pocket, for coverage under Medicare Part B.

Since Medicare is a federal program, a monthly premium is withheld from eligible retirees' Social Security checks. This payment covers the premium for Medicare Part B, which is $58.70 a month beginning this January. This represents an 8.7% increase in the monthly premium, up from $54 a month in 2002.

By requiring all eligible retirees to enroll in Medicare Parts A & B, the state effectively pushes some 80% of its insurance costs off on the federal government. Despite the fact that the state itself did not contribute towards Medicare when these retirees were actively employed, it has been allowed to save billions of dollars under the arrangement.

In 1991, when the state began to require Medicare enrollment, it was agreed that in addition to offering supplemental insurance coverage (Medigap) to provide for prescription drugs and other medical costs not covered by Medicare, that the state would reimburse retirees for their out-of-pocket Medicare premium expenses.

Without the annual refund, retirees would be forced to pay more for Medicare coverage than they pay for non-Medicare Plans. This would also violate the 90/10 and 85/15 contribution rates established by the Legislature.

"How Swift can justify forcing retirees to pay more for their insurance under Medicare, while the state saves millions of dollars a year is unexplainable. We are going to fight to recover this money and will enlist the help of our members when the time is right," said White. "The facts and time are on our side here."