Postal service reform bill would shift retirees health care costs to Medicare : Shots

A US Postal Workplace signal is seen displayed on February 10, 2022 in Houston, Texas. On February 8, the Home of Representatives handed the Postal Service Reform Act of 2022 (H.R. 3076). The laws will deal with operational and monetary points that the company has been grappling with for years.

Brandon Bell/Getty Photographs


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Brandon Bell/Getty Photographs


A US Postal Workplace signal is seen displayed on February 10, 2022 in Houston, Texas. On February 8, the Home of Representatives handed the Postal Service Reform Act of 2022 (H.R. 3076). The laws will deal with operational and monetary points that the company has been grappling with for years.

Brandon Bell/Getty Photographs

An extended-awaited invoice to repair the nation’s deteriorating mail service is on the verge of passage within the Senate, but it surely may come on the expense of a good greater and extra sophisticated downside: Medicare solvency.

The Postal Service Reform Act of 2022 would assist shore up submit workplace funds by ending the bizarre and onerous authorized requirement to fund 75 years of retirement well being advantages prematurely. In return, it could require future Postal Service retirees to enroll in Medicare.

In line with the Congressional Funds Workplace, the transfer may save the postal retirement and well being packages about $5.6 billion by means of 2031 whereas including $5.5 billion in prices to Medicare throughout that span, and possibly way more in later years.

Contemplating the large dimension of Medicare — it spent $926 billion in 2020 — the prices do not quantity to a lot. That small monetary influence, and the continuing rapid crises with mail supply, in all probability account for the sturdy bipartisan help the postal invoice has obtained in Congress, with 120 Republicans becoming a member of Democrats to cross the invoice within the Home on Feb. 8.

However late within the course of, some lawmakers are elevating alarms over the transfer, arguing that perhaps Congress ought to look extra rigorously on the monetary influence to Medicare’s belief fund, which is anticipated to run dry in 2026.

“This invoice merely shifts danger to Medicare recipients by including billions of recent prices to Medicare,” Sen. Rick Scott, R-Fla., mentioned Feb. 14 in blocking requests on the Senate flooring to expedite passage of the invoice. Scott’s objection delayed consideration of the invoice till early March, after the Senate returns from its Presidents Day break.

At the moment, Postal Service workers are lined by plans supplied within the Federal Workers Well being Advantages program. Once they retire they’ve a number of selections for well being care, together with staying of their unique plan or switching to Medicare as their main protection and having an FEHB plan function supplementary protection. About 20% of postal retirees don’t join Medicare, preferring their present federal plan. Below this laws, they must swap to Medicare, however they might hold a brand new Postal Service model of the FEHB plan as secondary protection.

Because the change would not totally take impact till 2025, and the Congressional Funds Workplace’s price estimate does not seize a full decade, Scott desires to know the worth tag for the subsequent 10-and 20-year durations, in addition to the particular impacts on the assorted elements of Medicare, resembling premiums for Medicare’s Half D drug plan and the Half B program, which covers quite a lot of outpatient providers.

The general price is more likely to be way more important than the shorter-term evaluation discovered, mentioned Robert Moffit, a senior fellow on the conservative Heritage Basis, who has additionally raised issues.

“There’s a whole price that is being ignored,” Moffit mentioned. “You mainly have a state of affairs the place you’ve got unfunded liabilities within the Postal Service Well being Advantages Program, retiree advantages, that quantity to about $75 billion.”

That projected price does not vanish. It falls on Medicare, although the precise influence is unclear. Moffit agreed with Scott that Congress must be taking a look at longer-term implications, together with results on premiums and the prices borne by taxpayers and beneficiaries.

“We should step again, take a deep breath, and have a look at what we’re doing right here,” Moffit mentioned.

Postal Service unions usually are not anxious concerning the change, nonetheless, with all of them supporting the swap, famous Democrats who responded to Scott earlier this month.

Senate Majority Chief Chuck Schumer argued that the invoice would save the federal government cash total, and that transferring postal retirees into Medicare would be sure that they obtain advantages they’ve paid for however weren’t utilizing.

For Schumer and most different lawmakers, the comparatively small influence on Medicare is just not as urgent as getting the mail delivered on time.

“We’ll cross this invoice as a result of America wants it. Rural folks want it. Senior residents want it. Veterans want it — 80% of the veterans’ prescriptions are despatched by means of the mail,” Schumer mentioned. “No person must be standing in the way in which of this invoice.”

Scott is now amongst a minority objecting to the most recent effort and pointing to Medicare.

Others who stay involved about Medicare’s poor funds additionally thought fixing the issues with postal supply was price the price to Medicare.

“I’d let Congress have a small win right here and, actually, this isn’t only a small win,” mentioned Mary Johnson, a Social Safety and Medicare coverage analyst on the Senior Residents League advocacy group.

She mentioned the failures of the mail system even have well being penalties, with funds for insurance coverage and shipments of prescriptions going lacking, which has occurred to her.

The shift to Medicare envisioned within the laws may add to the sense of urgency — all these retired postal staff could be becoming a member of Medicare simply in time for a solvency disaster if Congress drags its toes. “It is inaction in Congress that may trigger that,” Johnson mentioned.

Johnson famous it will likely be tough to succeed in a bipartisan consensus on one thing as momentous as Medicare reform. “You are going to need to cross one thing, and it is dependent upon who’s the bulk. It will not be very fairly when it occurs.”

KHN (Kaiser Well being Information) is a nationwide newsroom that produces in-depth journalism about well being points. It is an editorially impartial working program of KFF (Kaiser Household Basis).

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