The Administration and even the press are making it appear that the $5 billion early retiree reinsurance program contained in the PPACA is a new free standing idea. That is to be expected as they attempt to build support for the legislation and emphasize the new entitlements.
The Health and Human Services Department has released a fact sheet about this program.
Here is what it says in part:
“The percentage of large firms providing workers with retiree coverage has dropped from 66 percent in 1988 to 31 percent in 2008.”
That’s true, the reason being the high cost and a change in accounting rules.
“This temporary program will make it easier for employers to provide coverage to early retirees.”
Temporary program? Easier to continue to provide this coverage? How ironic, making it easier to provide early retiree coverage while at the same time making it considerably less desirable to continue older retiree prescription drug coverage.
Here is what is going to happen. No employer will add this coverage from now on, most employers offering it will continue to do so and take the money… then when the money runs out or we reach 2014 there will be an acceleration of the elimination of early retiree coverage.
That will further change retirement patterns and shift more costs to both individuals and the government. Ummm, “If you like the coverage you have, you can keep it.”
Unintended consequences, maybe or perhaps not if you want to accelerate the demise of employer based coverage.
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