Oh Good: Broke Cities Looking To Unload Expensive Retirees On ObamaCare
POSTED AT 6:31 PM ON JULY 7, 2013 BY ERIKA JOHNSEN
The Obama administration’s short-term panicked desperation to avoid ObamaCare-related consequences in the 2014 midterms is only matched by their relatively longer-term panicked desperation to convince young and healthy Americans to get with the program en masse. They’re going to need a heck of a lot of people with relatively inexpensive health-insurance needs to participate in and subsequently subsidize the inherently riskier and more expensive insurance pools the program creates by deliberate design — a redistributive fact of which the law’s supporters and administrators are all too aware.
But, heck, as long as ObamaCare is offering what we’re promised will be this miraculously subsidized (affordable?) health care system, why shouldn’t municipalities with insolvent pension and benefit programs take this wondrous opportunity to siphon off some of their incurred costs and just ease them onto the national system? Problem, solved — amirite? Via Bloomberg:
Detroit is facing bankruptcy, and Chicago wants to cut retiree benefit costs. Both are turning to President Barack Obama’s health-care overhaul in what could become a road map for cash-strapped cities. …
“That will become an option that I think a lot of employers and a lot of cities would look at,” said Ario, now a managing director of Manatt Health Solutions, a Washington consulting firm that advises insurers. …
In Detroit, reducing benefits for 30,000 employees and retirees is part of Emergency Manager Kevyn Orr’s plan to avoid the largest U.S. municipal bankruptcy by erasing a $386 million deficit and attacking a long-term debt of at least $17 billion.
The city had 19,389 retirees eligible for health, life-insurance and death benefits as of June 30, 2011, according to Orr’s plan. The insurance benefits cost the city $177.4 million in fiscal 2012. Retirees contributed an additional $23.5 million.
Orr wants to give current and former workers health-reimbursement accounts. The city would pay from $100 to $250 a month to help with medical costs or premiums under the Patient Protection and Affordable Care Act, according to a proposal to city unions.
That would cost the city as little as $27.5 million annually, according to Orr’s plan.
If more indebted cities (states?!) cotton on to the potential for savings by ending their plans with currently insured older Americans and transferring them to the exchanges, then who knows what this will look like, but I would suggest that ObamaCare and the prices for the younger subsidizers are going to get still more expensive than anyone predicted. …Ah, well. After all, who could’ve seen this coming, really?
Thank You Hot Air and Ms Johnson.