One by one at a city council meeting last month, Olathe residents — most of them retired city employees — came forward to voice concerns about rising health insurance premiums.
Nine speakers in all addressed the city council at its Nov. 4 meeting.
“Ever since we received this information about the 2026 cost increase, we’re trying to figure out how we can afford it,” said retired Olathe police officer Damon Bell. “And to be honest, this is scary.”
Health insurance premiums are going up across the U.S., and a high-profile battle over subsidies for those on the federal ACA marketplace led to the recent government shutdown. But in Olathe, another factor is at play.
The city recently announced that it is sharply reducing its contribution to health care premiums for retired city employees next year — a decision that some of those impacted say is making them think twice about their retirement.
“You’re upending my retirement”
Steve Menke, who was an Olathe Police Officer for 31 years — 10 of those as the city’s chief of police — asked the city council to reconsider its decision.
“The city of Olathe’s dedicated employees, past and present, are the most important asset to the city,” Menke said. “They have all contributed to the success and recognition of the city’s services to our citizens and visitors.”
Menke, who retired in 2019, said his annual premium cost will increase from $22,250 to $31,639 in 2026, a 42% hike.
Other speakers at the Nov. 4 meeting said they were facing more severe increases.
Retired Olathe firefighter Gary Nickerson said the city won’t be paying any of his monthly premium under his health insurance plan next year, so the cost will go up $800 a month.
“You’re upending my retirement to where I may have to go back looking for a full-time job,” Nickerson told the council.
Nickerson wasn’t the only speaker who is considering going back to work because of the increase in premiums. Olathe police officer Eric Hardman recently submitted his retirement paperwork, something he says he now regrets.
“Had I known the city was going to increase their medical premiums, I would not have submitted my retirement paperwork,” Hardman said. “I would have continued to work for a couple more years.”
Why is this happening?
The city’s policy of subsidizing all or part of retired employees’ health insurance premiums began in the 1980s. Back then, the city decided to give retirees the same rate as active employees as a way to recruit employees.
That stayed in place until 2005, when Olathe began covering up to 90% of retirees’ premiums compared to active employees. But that is set to dip sharply starting in 2026, when the city plans to lower its contribution to 50%, citing budget issues.
Depending on the plan and coverage level, a retiree’s monthly out-of-pocket premium could jump 500%.
The problem of rising health insurance premiums is one felt broadly across the U.S. The average annual premium for families on employer health insurance plans is about $27,000 — a 6% increase from last year, according to a recent KFF survey. On average, the employees in the KFF survey contributed $6,850 of that cost annually.
The survey found that over a third of companies with at least 200 employees pointed to higher drug prices as the reason for higher premiums. Other contributing factors were higher utilization of medical services and increasing hospital prices.
“Rising health care costs are part of a national issue driven by multiple economic factors,” the city said in a statement to the Post. “Unfortunately, the City of Olathe is not exempt from external influence.”
Olathe spokesperson Cody Kennedy said that even after decreasing its contributions, the city’s plans are still generous and are more in line with other Johnson County cities.
Kansas allows government entities to charge retirees up to 125% of a plan’s premium— meaning the retired person would pay their entire premium plus a 25% fee, which Olathe is not doing.
Why public safety employees are feeling a particular pinch
Kansas law requires cities to offer health insurance to retirees who worked at least 10 years but are not yet 65, which is when they qualify for Medicare.
Because of the long shifts and physical demands of their jobs, police and firefighters qualify for retirement earlier than most other government employees, meaning they are typically on the city’s retiree health insurance for longer. It also means many of them still have children who are on their insurance plans when they retire.
There are 130 retirees on the city’s benefits plan who will be impacted by the change. Of those, 90 are former firefighters, police officers or EMTs.
Olathe offers several medical plans to retirees, but the cost varies widely based on when they retired, whether dependents are covered and how much of the premium the city pays.
“This didn’t sneak up on anybody”
Several retirees told the city council that they felt blindsided by the extent of the increases set to take effect next year.
“This is something that didn’t sneak up on anybody,” Nickerson said. “There should be a long-term plan on how to deal with this and not knee-jerk reactions for ‘What are we going to do this year?’”
City officials said they were unaware of how steep the increases would be until shortly before open enrollment because Olathe uses an insurance broker to set its rates.
Because of this, Olathe is giving retirees an extra five weeks to consider their options.
After the city council meeting last month, Olathe announced it would give retirees on certain plans a subsidy of $250 a month to help cover the gap.
“Olathe remains committed to providing competitive wages and benefits to attract and retain employees while balancing the ability to offer competitive insurance offerings to retirees,” the city said in a statement to the Post.
Still, for retirees like Nickerson, the options remain difficult. With the increase in premiums across the country, he said he doesn’t feel that joining the federal ACA marketplace is a better alternative.
“I’m literally being held hostage,” he said. “I don’t know what I’m going to do.”
