The White House announced today that almost 2,000 employers and unions will be eligible to submit retirees’ medical bills for reimbursement by a $5 billion federal fund, indicating a significant number of claims will be made against the fund.
Individual organizations have been informed of their acceptance. Now the question becomes, how will the refund for early retried medical expenses be used by the plans. Retirees will not necessarily see a reduction in any of their costs. We covered the possibilities earlier. In addition, when these funds are exhausted and the insurance exchanges begin operation in 2014 there is likely to be a dramatic increase in the number of employers eliminating retiree medical coverage.
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And you didn’t think we knew what we were doing.
The Employee Benefits Research Institute earlier estimated that the $5 billion in the fund would likely be exhausted within two years rather by 2014 when the program expires. This high number of approved applicants is likely to accelerate the spending of available funds.
Background on the subsidy program and full results of the EBRI analysis, “The Early Retiree Reinsurance Program: $5 Billion Will Last About Two Years,” are in the July 2010 EBRI Notes.
You can see what companies and organizations in your state have been approved to receive payments when they submit claims on healthcare.gov
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