Health Care Fund for ERs: Running out of money early

[samclem]

One part of the new health care law was intended to help fund health care for early retirees (those who retire before qualifying for Medicare). The law set up a $5 billion fund (the EERP -- "Early Retiree Reinsurance Program") that was supposed to be used to bridge the gap until 2014, when the universal coverage, etc comes into force. The funds were to go to needy companies and unions to help them fund medical benefits for early retirees.

Hearings last week highlighted some problems with the program. It appears to be burning through money at a tremendous rate (imagine that!). From this link:

Also, the administration is racing through the $5 billion much faster than it previously projected — it was supposed to last until 2014, when no person will be denied coverage for a pre-existing condition. New statistics and projections, however, suggest it may run out before the end of 2012, and the Department of Health and Human Services (HHS) and the Center for Medicare & Medicaid Services (CMS) announced on Thursday they will no longer be accepting applications for subsidies after April 30. Between June 1, 2010, and Dec. 31, 2010, ERRP paid out $535 million, and during the first few months of 2011, ERRP has handed out another $1.3 billion.

In addition, there are allegations that the funds are being used to preferentially fund groups based on political factors. From this (.gov but partisan) link:

Over one third of the $535 million spent in 2010 went to five public union benefit and pension plans, in California, New Jersey, Georgia, Kentucky, and Texas. 56% of all funds distributed in 2010 went to government organizations. Over five thousand entities have been approved for EERP bailouts, and 47% of them are government organizations.

Of the money that has gone to private companies, there appears to be little effort to determine a real need, so some fairly big companies with solid balance sheets are reportedly loading up on the free money.

Aside from the political theater and the allegations of another problem with the design and implementation of the new health care law, the issue might affect those who are counting on maintaining their company medical care benefits when they retire early. If the company's promises are based on the availability of these government funds, the truth might change.

Obviously, more to follow.

 

[dgoldenz]

I am shocked....shocked! Never would have guessed.

 

[frank]

any time you count on government funding you are in for problems. politicians change like the wind depending on whose money is blowing their way.

 

[WhoDaresWins]

It makes me sick that everything is about patronage and kick backs. I think that all parties in such arrangements should go to jail.

 

[ziggy29]

It makes me sick that everything is about patronage and kick backs. I think that all parties in such arrangements should go to jail.

When you get government by, of and for the big corporations, we shouldn't ever be surprised when every major law that gets passed somehow favors their ability to line their pockets.

 

[ERD50]

When you get government by, of and for the big corporations, we shouldn't ever be surprised when every major law that gets passed somehow favors their ability to line their pockets.

Agreed, but I think you missed a few groups. Allow me to edit that for you:

When you get government by, of and for the big corporations and big Unions, and blocks of voters who pay zero FIT and/or get rebates, we shouldn't ever be surprised when every major law that gets passed somehow favors their ability to line their pockets.

-ERD50